In 2022, China's fiscal revenue increased 0.6 per cent from a year earlier, but fell sharply from a 10.7 per cent increase in 2021 due to huge tax rebates for businesses to support the COVID-ravaged economy, according to data from the finance ministry on Monday.
Fiscal revenues reached 20.37 trillion yuan $3.02 trillion last year, while expenditures reached 26.06 trillion yuan, which grew 6.1 per cent, the ministry said in a statement.
It resulted in a shortfall of 5.69 trillion yuan.
Revenues rose 9.1 per cent in 2022 after adjusting for the impact of value-added tax credit rebates, the ministry said.
The world's second-largest economy grew 3 per cent in 2022 from a year earlier, badly missing its official target of around 5.5 per cent and hitting one of its worst rates in nearly half a century. The growth is expected to rebound to around 5 per cent in 2023, after Beijing ditched harsh COVID curbs in early December.
China will increase fiscal expenditures in 2023, set up a reasonable amount of special local government bonds to boost investment, improve tax and fee policy to support businesses facing difficulties, and improve tax and fee policy, the ministry said.
The ministry said that China's tax and fee cuts, tax refunds and deferred payments totaled 4.2 trillion yuan in 2022, including 2.4 trillion yuan in VAT tax rebates, the largest in recent years.
China's fiscal revenue jumped 61.1 per cent in December from a year earlier, while fiscal spending rose 3.0 per cent, according to official data.
The ministry vowed to curb new government hidden debt and regulate local government financing vehicles LGFVs - usually investment companies that raise money and build infrastructure projects on behalf of local governments, in order to avoid systemic risks.