Ministry of Finance data indicate that the national general public budgetary revenue was 18.29 trillion yuan ($2.83 trillion) in 2020, down 3.9 percent from the previous year, and the central government and local governments saw their budgetary revenue drop 7.3 percent and 0.9 percent respectively.
The government’s tax revenue and non-tax revenue last year was 15.43 trillion yuan and 2.86 trillion yuan respectively, down 2.3 percent and 11.7 percent from 2019.
At the same time, the government’s general public budgetary expenditure was 24.56 trillion yuan, up 2.8 percent, with the central government spending being 3.5 trillion yuan, down 0.1 percent, and that of the local governments 21.05 trillion yuan, down 3.3 percent.
The decrease in revenue because of the lockdown and increased expenditure to subsidize people’s livelihoods and revive the economy means there was a gap of about 600 million yuan, highlighting the necessity for the government to reduce unnecessary expenses and consider moderately increasing the financial deficit so as to maintain the government’s basic operation.
Last year, the added-value tax and corporate income revenue fell 8.9 percent and 2.4 percent respectively from 2019.
That is a hard-earned result as the government has rebated 1.46 trillion yuan tax for export, and the tax cuts and fee reductions for enterprises of more than 2.5 trillion yuan was aimed at easing their financial burden and helping them weather the storms.
Despite the tensions between revenue and expenditure, the government’s spending on public services, people’s livelihoods, medical care, education and poverty alleviation has kept increasing.
The government’s spending on public health last year was 15.2 percent more than 2019, social security and employment increased 10.9 percent, education up 4.4 percent, and debt service surged 16.4 percent.
To support the fight against the novel coronavirus, the central government issued 1 trillion yuan of special government bonds, and an additional 1.6 trillion yuan of special local government bonds.
These efforts show how governments at various levels have taken care of the people during difficult times.