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By Guo Yingzhe and Cheng Siwei / Feb 11, 2020 01:13 PM / Economy

Photo: VCG

Photo: VCG

China’s fiscal revenue grew at the slowest pace since 1987 last year amid slowing economic growth and big tax and fee cuts, official data showed Monday.

Fiscal revenue grew 3.8% to 19 trillion yuan ($2.7 trillion) in 2019, according to (link in Chinese) the Ministry of Finance, missing the annual target of 5% growth. It was 2.4 percentage points lower than the revenue growth for 2018 and the second consecutive annual slowdown.

The central government collected 4.5% more revenue than the previous year, while local governments collected 3.2% more. This meant they missed the officially set growth targets of 5.1% and 4.9%.

Tax and fee cuts are the major reason for the revenue slowdown, the finance ministry said. Tax revenue for 2019 rose only 1%, 7.3 percentage points lower than the previous year. China cut taxes and fees by over 2.3 trillion yuan last year in order to ease corporate burden and shore up the slowing economy.

As tax cuts hit government revenue, authorities have resorted to other revenue sources to make up the funding shortfall, such as selling state-owned assets including land, and creaming off more profits from state-owned enterprises. Official data showed that nontax revenue in 2019 grew 20.2%, while it fell 4.7% the previous year.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: Local Governments Miss 2019 Revenue Targets

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