Fiscal revenue is regarded as the “barometer” of the economy. The latest national fiscal revenue data in 2021 is better than expected, reflecting the steady and good trend of the economy.
On January 25, Vice Minister of Finance Xu Hongcai introduced the national fiscal revenue and expenditure in 2021 at the press conference of the state information office. Last year, the national general public budget revenue exceeded the threshold of 20 trillion yuan for the first time, reaching 20.25 trillion yuan, an increase of 10.7% over the previous year, and there was a certain excess. In the whole year, the national general public budget expenditure was 24.63 trillion yuan, an increase of 0.3%.
According to the statistics of the first finance and economics reporter, compared with the budget report at the beginning of last year, the actual implementation of general public budget revenue last year was about 480 billion yuan higher than expected, that is, the financial revenue exceeded 480 billion yuan. The general public budget expenditure is slightly lower than the budget at the beginning of the year, with a decrease of about 380 billion yuan.
Xu Hongcai said that the fiscal overcharge was realized on the basis of increasing the intensity of tax reduction and fee reduction. It was mainly driven by the recovery of economic stability, especially the higher increase of the ex factory price index of industrial producers. It was consistent with the overall trend of economic operation and the growth of enterprise profits, and it was also in line with expectations. The effective implementation of the policy of tax reduction and fee reduction did not increase the burden on market subjects. The excess income provides financial support for maintaining the expenditure intensity this year and promoting the sinking of financial resources.
According to the analysis of first finance and economics by many finance and taxation experts, the fiscal excess last year reflected the overall trend of steady economic recovery. The economy is stable this year. It is expected that the growth pressure of fiscal revenue is greater than that of last year, and the revenue and expenditure is still in a tight balance. Last year’s excess income can be put on this year’s expenditure, which is conducive to maintaining a certain expenditure intensity, supporting the implementation of larger tax and fee reduction policies this year, and promoting the smooth operation of the economy, which also reflects cross cyclical regulation.
overcharge
At the beginning of each year, the government budget report will have an estimate of the fiscal revenue of the current year. When the actual implementation amount of the final revenue exceeds the estimate, it is an over revenue.
In recent years, affected by the economic downturn, tax reduction and fee reduction, the growth of fiscal revenue is weak. Local governments are more cautious in determining the expected revenue. Last year, the national general public budget revenue was about 19.77 trillion yuan, but the final actual revenue data was better than the expectation at the beginning of the year, exceeding the revenue by about 480 billion yuan. The growth rate of fiscal revenue is also slightly higher than that of the economy.
“The excess revenue is based on the continuous consolidation of China’s achievements in epidemic prevention and control and the sustained and stable recovery of the economy.” Xu Hongcai said.
Last year, China’s economic growth (calculated at constant prices) reached 8.1%, achieving the expected economic development target of more than 6% for the whole year. Shi Wenwen, a professor at China University of political science and law, told first finance that if calculated at current prices, the economic growth rate was higher last year, and the growth rate of fiscal revenue was similar to that of the economy. It can be seen that the fiscal excess revenue did not deviate from the economic development trend and budget arrangement, which was in line with expectations. The excess income also reflects the positive signal of orderly economic recovery.
Yang Zhiyong, a researcher at the Institute of financial strategy of the Chinese Academy of Social Sciences, told China first finance that the excess income was due to the higher than expected economic growth and price factors.
Xu Hongcai believes that the financial over revenue is based on the growth of enterprise operating revenue and profit. Affected by factors such as the sustained and stable recovery of the economy and the rise of commodity prices, Chinese enterprises, especially upstream enterprises, increased their operating revenue and profits, driving the growth of fiscal revenue.
Although the fiscal revenue exceeded and the income growth rate reached a rare double-digit in recent years, it was related to the low base hit by the epidemic in the previous year. From the perspective of relaxation in recent years, in fact, the growth rate of fiscal revenue last year was not large.
Xu Hongcai said that although fiscal revenue exceeded revenue in 2021, compared with 2019, fiscal revenue increased by 6.4%, with an average growth of 3.1% in two years. The growth rate was lower than GDP growth. The proportion of fiscal revenue in GDP continued to decline, and the pressure of fiscal support for economic and social development was still great. Therefore, we should treat fiscal revenue exceeding revenue rationally and objectively.
Luo Zhiheng, chief economist of YueKai securities and President of the Research Institute, told China first finance and economics that fiscal excess revenue measures the difference between budget implementation and budget, which reflects that the budget at the beginning of the year is relatively stable. On the other hand, it reflects that the actual economic operation is better than expected, mainly due to the rise of fiscal revenue driven by economic recovery growth and the rise of commodity prices.
According to the budget law and other regulations, the excess income can only be used to offset the deficit or supplement the budget stability adjustment fund. The budget stability adjustment fund is used to make up for the shortage of budget funds in subsequent years.
Xu Hongcai said that last year’s excess income was used to supplement the budget stability adjustment fund in accordance with the provisions of the budget law, and there was no arrangement for last year’s expenditure. This will provide more resources and space for this year’s budget arrangement, and also provide financial support for maintaining this year’s expenditure intensity and promoting financial sinking.
“Since the excess income is included in the budget stability adjustment fund, there is no doubt that this part of the fund can be used this year.” Feng qiaobin, Deputy Secretary General of China Institute of finance, told China first finance and economics.
short branch
On the contrary, the national fiscal expenditure was slightly lower than expected last year.
In this regard, Shi Wenwen believes that this is a normal phenomenon. In recent years, in order to enhance financial sustainability, the concept of increasing revenue and reducing expenditure has been strengthened, local expenditure has been more cautious, more concerned about expenditure efficiency, and expenditure has been strict. In addition, the government is living a tight life, significantly reducing general expenditure and freeing up funds to focus on ensuring people’s livelihood expenditure. In addition, due to the lack of good projects and strict management, the growth rate of government investment expenditure slowed down significantly.
Yang Zhiyong also holds the same view, “this is a normal phenomenon. We can’t spend without budget. A few expenditures may not be spent because the project implementation conditions are not available. It can also be seen that the expenditure is more strict.”
Xu Hongcai said that last year, governments at all levels took the lead in living a tight life, strictly controlled general expenditure, strengthened the management of “three public” funds, and worked hard to reduce administrative operation costs. For example, after excluding the expenditure of national defense and armed police, interest payment of national debt issuance and reserves, the expenditure of the central department at the same level decreased by 8.2% year-on-year, which was realized on the basis of continuous reduction in previous years, reflecting the requirement of the central government to take the lead in living a tight life.
In addition, he said that the expenditure in key areas such as “Three Guarantees” at the grass-roots level has been effectively guaranteed. For example, last year, the expenditure on education, social security and employment exceeded 3 trillion yuan, with a growth rate higher than that of the overall expenditure.
Luo Zhiheng said that the growth rate of fiscal expenditure is slightly lower than the budget expenditure, which is also related to the operation of the economic situation, that is, the intensity and rhythm of fiscal expenditure should be related to the dynamic economic situation, rather than completely adhering to the budget at the beginning of the year, which generally supports the stable economic and social operation and promotes the stability of scientific and technological innovation and employment, which shows that the expenditure is generally reasonable.
Last year, some people believed that the issuance of local government special bonds was slow, affecting the progress of expenditure. But this also precisely reflects the cross cyclical regulatory role of fiscal policy.
Xu Hongcai introduced that in accordance with the decision-making and deployment of the Party Central Committee and the State Council, we strengthened cross cycle regulation and grasped the strength and rhythm of bond issuance according to the economic operation. Last year, on the whole, it was slow and fast. The economy recovered well in the first quarter, and the overall issuance pace was appropriately slowed down. In the second half of the year, facing the new downward pressure of the economy, we accelerated the issuance and use of local bonds, especially special bonds. The issuance of new special bonds exceeded 70% of the annual issuance. The expenditure on the arrangement of special bonds in the fourth quarter accounted for about 50% of the total annual expenditure, driving the expansion of effective investment, Promote economic operation within a reasonable range.
Xu Hongcai told first finance that in order to better play the positive role of special bonds in stimulating effective investment and stabilizing economic growth, the Ministry of finance, together with relevant departments, continued to strengthen the management of special bonds. This includes reasonably determining the new quota, strictly controlling the direction of financial support, and strengthening daily supervision and management. The Ministry of finance will continue to strengthen the management of special bonds, guide local governments to do a good job in the issuance and use of bonds, continue to give full play to the positive role of special bonds in driving the expansion of effective investment, and promote the economic operation within a reasonable range.
At present, local governments have accelerated the progress of issuing bonds. As of January 24, the issuance scale of new bonds by local governments has reached at least 343.3 billion yuan, mainly special bonds. The agency expects that the 1.46 trillion yuan of special bonds issued in advance will be issued in the first quarter of this year, superimposing the 1.2 trillion yuan of special bond funds in the fourth quarter of last year, which will stimulate investment and underpin the economy.
fiscal revenue and expenditure are in tight balance this year
Under the background of increasing downward pressure on the economy, the fiscal revenue situation this year is not optimistic.
Xu Hongcai said that the Ministry of finance is carefully analyzing the situation, studying and calculating the budget arrangement of fiscal revenue in 2022. In general, we should consider the impact of many uncertain factors in combination with economic growth. In particular, we should make arrangements for the implementation of greater tax cuts and fee reductions in the budget revenue. Based on the consideration of these factors, the Ministry of Finance reasonably arranges the budget revenue in 2022.
Feng qiaobin said that this year’s fiscal revenue situation will not be as good as last year. At present, the economy is facing increasing downward pressure, which can be seen from the decline of economic growth in the third and fourth quarters of last year. Economic growth slows down, and under the high base of last year, the growth rate of fiscal revenue will slow down. In addition, the rising momentum of commodity prices is expected to pass in the first half of the year, and the fiscal excess has lost its foundation.
Yang Zhiyong also believes that the fiscal revenue situation this year is more severe, because the economy determines finance, the economy will face triple pressure in 2022, and growth may face greater challenges.
According to the data of Zhongtai Securities Co.Ltd(600918) Research Institute, 24 of the 29 provinces this year lowered their economic growth targets.
In order to bail out enterprises, the central government has made it clear that a large-scale tax reduction and fee reduction policy will be implemented in 2022. Many finance and taxation experts told China first finance and economics that the scale of tax reduction and fee reduction is expected to exceed 1 trillion yuan, which will lead to certain pressure on local revenue reduction and fiscal revenue increase.
At present, the State Council has made clear a wave of continuation policies for tax reduction and fee reduction, including the continuation of the preferential policies for separate tax calculation of year-end bonus, and the scale of tax reduction has exceeded 100 billion yuan.
Xu Hongcai said that this year, we will implement and refine various tax reduction and fee reduction and tax mitigation policies that have been issued, and consolidate and expand the effectiveness of tax reduction and fee reduction policies. Study and introduce new combined tax and fee reduction policies, accurately focus on the high-quality development of the manufacturing industry, and accurately focus on supporting the relief of small, medium-sized and micro enterprises and individual industrial and commercial households.
At the national financial work conference at the end of last year, finance minister Liu Kun called for full consideration of the impact of tax reduction and fee reduction this year, reasonably determine the fiscal revenue target, and resolutely prevent over collection of taxes.
At present, considering the impact of economic downturn, tax reduction and fee reduction, some places have lowered the fiscal revenue target for this year. For example, Guangdong, the largest financial province, expects the growth rate of general public budget revenue this year to be 5%, which is lower than the growth rate of 9.1% last year.
Luo Zhiheng predicts that the growth rate of general public budget revenue will be about 6% in 2022, and the budget revenue of government funds will decline significantly due to the cooling of the real estate market, with a year-on-year growth rate of about – 5%.
