2014-06-26

Natural Resource Dependent Provinces See Tax Revenues Tumble

This article focuses on the natural resource producing provinces, who have seen their tax revenues slump. This is now several years into a natural resource recession, but revenues may be finally succumbing to weaker industrial growth and the real estate slowdown.

Inner Mongolia tax revenues down 12.4% yoy in May, non-tax revenue is up 31.3% yoy. Year to date, total revenue is up 0.1% yoy. Revenues are currently 37.1% of projected 2014 year-end levels. Non-tax revenues are 37.5% of total revenue, which makes Inner Mongolia's revenues "low quality" since non-tax revenues are not stable.

Shanxi also sees poor revenue growth. Total revenues are up 2.7% ytd through May, but tax revenues are down 9.6%.

Shaanxi saw tax revenues increase only 1%, non-tax revenues grew 23.5%, for total growth of 13%.

内地多省现税收负增长 靠非税收支撑
Financial resources in the province's income situation of recent years seems deteriorating.

One obvious indicator is that, as in May, an Inner vested local tax revenue fell 12.4%. The same is "hard" last year, ending the year in May, Inner Mongolia, tax revenues are still 2.5 percent growth.

Inner Mongolia is just a typical representative of the resource provinces. Several provinces of Shaanxi, Shanxi, Henan, such as the taxation data firm behind, in fact, appear weak revenue growth, or even negative growth, mainly by non-tax revenue to support the phenomenon.

According to the 21st Century Business Herald reporter, in the second half of last year, Inner Mongolia Autonomous Region government transfer payments allocated gave grassroots counties, municipalities and counties for the financial difficulties of some of the basic operating expenses.

Chinese Academy of Social Sciences Institute of Finance Strategic Financial Research Director Yang Zhiyong, the 21st Century Business Herald reporter said that, overall government revenue situation is relatively stable, some of the provinces resources will be affected by some local governments affected. Government revenue situation is good, difficult transition; financial stress, and let the market play a decisive role in the pressure also increases.

Weak growth in tax revenue

According to statistics, the first five months of this year, the national tax authorities of tax revenue 5.09 trillion yuan organization, an increase of 8.6%, the growth rate was down trend. State tax revenues fell resources, and much more violent.

1-5 months, Inner public revenue 68.25 billion yuan, increase 060 million yuan, an increase of 0.1%; completed 37.1 percent of the annual budget, behind time series. Among them, the tax revenue 42.65 billion yuan, down 12.4% ; non-tax revenue 25.6 billion yuan, an increase of 31.3%.

Unlike non-tax revenue tax, their income is not sustainable. In recent years, with the growth of tax revenue weakness, many provinces have taken efforts to increase non-tax revenue, since, by supporting the overall revenue growth. Inner Mongolia in May non-tax revenue in fiscal revenue accounted for 37.5%, the proportion of poor revenue means high quality.

Other provinces have similar phenomena. 1-5 months, Shanxi local public finance revenue was 77.48 billion yuan, an increase of 2.7%. The first five months, Shanxi tax revenue 47.63 billion yuan, down 9.62% ; among local tax revenues attributable to the completion of 13.813 billion yuan, an increase of only 0.21%.

According to the IRS, Shanxi explained by industrial slowdown, coal and other factors leading sources of tax revenue to shrink, resulting in a reduction in the province's tax revenues 5.071 billion yuan.

Such as Henan, April, Henan province's total fiscal revenue 32.34 billion yuan, an increase of 7.8% over the same period last year. Among them, the tax revenue 16.47 billion yuan, an increase of 2.1%.

Again, Shaanxi, as of the end of May, Shaanxi local fiscal revenue 72.535 billion yuan, an increase of 13.08%. Among them, the tax revenue of 50.747 billion yuan, an increase of only 1.0%; non-tax revenue accumulated 21.788 billion yuan, an increase of 23.5%.

Grab revenue, for the "double half"

Recently, the State Administration of Taxation issued a circular on the organization of the work of tax revenue. SAT noted that the current economy is generally stable, but downward pressure is still large. Tax authorities at all levels should strengthen tax analysis, strengthen tax collection and safeguard the legitimate rights and interests of taxpayers, stimulate the vitality of market players, to lay a solid foundation for the successful completion of the task of tax revenue.

With the first half will be coming to an end, our budget "double half" of the task has become more urgent. Recently, the provincial down to the cities and counties in research, have stressed the need to strive to complete the balance of payments objectives and tasks.

June 18, deputy director of Shaanxi Provincial Department of Finance 苏新泉 held a forum in Baoji City, he pointed out that in terms of revenue, should the tax, non-tax revenue close up firmly prohibit arbitrary tax relief, but to do tax law, focusing on revenue quality; spending, spending to speed up the progress of work, while ensuring that the money is used wisely.

June 18-19, Local Taxation Bureau, Inner Mongolia Party Secretary Zhang Enhui led, to Manchuria research. Manzhouli Local Taxation Bureau Zhou Shiming stressed convey speech, "At present, the priority is to catch income."

Zhou Shiming pointed out that to everyone who has indicators, give full play to the initiative and creativity, to mobilize the enthusiasm of all aspects to create a strong joint effort to tackle tough, determined to complete the first half of the income of the organization of work tasks.

Specifically included attention to trying to project construction, firmly grasp the economic growth, in-depth judged economy trends closely track the impact of macroeconomic changes on tax sources closely tracking the fixed asset investment and progress of key projects.

Reduce unnecessary expenses

Inner Mongolia Academy of Social Sciences Institute of Economics at the light forces, on the 21st Century Business Herald reporter, said this year's financial tensions in Inner Mongolia, on the one hand because it is resources in the province, by the macroeconomic impact of a few large heavy chemical industry in Inner Mongolia accounted for than high impact on government finances. On the other hand, due to the Government's initiative to let, reduction of some taxes, has a policy of reduction.


Light military bluntly, government financial stress, reduce government intervention in the market is a good thing. However, Inner Mongolia, some higher proportion of agricultural counties, local public services are mainly provided by the government, reducing government financial resources, the impact is relatively large.

According to Ministry of Finance data, cumulative to May, the national fiscal revenue 6.11 trillion yuan, an increase of 8.8%. With the first quarter GDP growth rate of 7.4%, the situation is more considerable revenue.

For those financial growth fell significantly province, what can the Government do?

Yang Zhiyong said that economic indicators is not very good, do not immediately think of what government can do. Overcapacity now very prominent macroeconomic adjustment which is some of the out of business should be eliminated, the government should not mess helping hand. Money is tight, you can reduce unnecessary expenses and livelihood expenses should also be within their means

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