China’s Finance Minister Liu Kun has highlighted the country’s fiscal revenue growth prospects for the year ahead, pointing to an expected improvement in the economy as a key driver. Speaking at a news conference in Beijing on Wednesday, the minister emphasized that the foundation for economic recovery is not yet solid, and thus uncertainties for fiscal revenue still remain.
However, Liu also noted that the refund of newly added value-added tax (VAT) credits in large scale last year had brought fiscal revenue to a relative low level, which makes revenue growth this year more likely. This, coupled with the rebounding economy, lays a good foundation for the growth of fiscal revenue.
Liu acknowledged that last year saw a decline in land transfer fees, which is part of the government-managed funds budget, but he assured that the impact of this decline on local fiscal expenditure is manageable. He also explained that the decline in income from land transfer fees will lead to a decrease in expenditures in areas such as compensation for demolition and relocation, thus mitigating the negative impacts of an income decline.
All in all, Liu’s comments suggest that China is optimistic about its economic recovery and the prospects for fiscal revenue growth, despite uncertainties that remain. This bodes well for the country’s overall economic outlook and underscores the resilience of its economy amidst ongoing global challenges.