Sliding Revenues Hit the Chinese Government
The Ministry of Financial showed on its website on February 16 that the revenues the government had received was 613.16 billion yuan in January, 17.1 percent lower than a year earlier, within which the central government covered 296.48 billion yuan while the local government occupied 316.68 billion yuan, down 28.4 percent and 2.7 percent from a year earlier respectively.
It’s analyzed last month by the ministry that the rapid drop in the revenue mainly resulted from the financial crisis. It hurt the companies and led to lower profits. There was a drop of about 24.8 percent last month in the corporate income tax growth, compared with a year earlier.
In order to help the corporate to go over the economic downturn, the ministry said, the government had decided to cut the tax. In 2008, the government cut the stamp tax for share dealing and moved the tax rebates up for textile and garment exports. For example, 63.42 billion yuan was spent in tax rebates for exporters, 25 percent higher than a year earlier.
In addition, the past Spring Festival also stooped the revenue collection.
Li Zhikun, analyst with China Securities Co. said, “The government will be clouded by an even severer fiscal situation in 2009 as revenues are going on slumping this year.”
In the estimation by Ha Jiming, an economist with China International Capital Corp, it showed that the government had to launched treasury bills which amounted to 1.3 trillion yuan to support its stimulus package. And in comparison with the 750 billion yuan in 2008, it zoomed up 70 percent which was an awful jump.
Are you interested in the business opportunities in China?
China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.
BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.
Please visit http://www.BPOVIA.com/ for details about our service.
Popularity: 2% [?]