China says 2021 budget revenue will grow 10.7% year-on-year, boosted by economic recovery

BEIJING, Jan 25 (Reuters) – China’s budget revenue rose 10.7% in 2021 from a year earlier, buoyed by last year’s economic recovery, the vice minister of foreign affairs said on Tuesday. Finance Xu Hongcai, as the government draws up budget plans for 2022.

Gross domestic product (GDP) grew 8.1% in 2021, the fastest rate in a decade, partly due to the low base of 2020, when COVID-19 rocked the economy, comfortably outpacing an official target of “more than 6%”.

“The steady GDP growth has laid a good foundation for tax revenue growth,” Xu told a news conference.

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Revenue in 2021 totaled 20.25 trillion yuan ($3.2 trillion), behind expenses of 24.63 trillion yuan, which rose 0.3 percent, Xu said.

China cut taxes and fees by more than 1 trillion yuan last year, Xu said.

The government is making its budget plans for 2022 by analyzing the economic situation and many uncertain factors, Xu said without giving further details, although there are concerns about a recent increase in COVID-19 infections.

China will reasonably set the annual quota on local government bonds this year to boost infrastructure investment, focusing on construction projects and major projects, while preventing debt risks, Xu said.

The Ministry of Finance issued 1.46 trillion yuan under the 2022 advance quota for local special bonds. Read more

The government will unveil deeper tax and fee cuts in 2022 in response to downward pressure on the economy, Xu said.

The central government will increase its transfer payments to local governments to help ease their fiscal strains and achieve planned tax and fee reductions, he said.

China will be able to achieve economic growth of around 5.5% in 2022, a government cabinet adviser said last week, although some independent analysts became less optimistic after recent data indicated a slowdown in dynamics. Read more

($1 = 6.3281 Chinese yuan renminbi)

renminbi yuan)

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Reporting by Kevin Yao and Beijing newsroom; Editing by Christian Schmollinger, Kim Coghill & Simon Cameron-Moore

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