The Ministry of Finance announced Wednesday that China's fiscal revenue in July rose 10.2 percent year on year to 669.59 billion yuan (97.96 billion U.S. dollars).

The July figure brought total fiscal revenue in the first seven months to 4.067 trillion yuan, down 0.5 percent year on year, the ministry said.

Fiscal revenue has been on the rebound since May, when 4.8 percent annual growth was registered. In the first four months, the figure fell 9.9 percent year on year.

The rebound in fiscal revenue growth was mainly because of an improvement in the country's economy, rising business taxes and increased cigarette tax.

An Tifu, professor with the School of Finance of the Renmin University of China, said the rebound reflected the picking-up of the economy and authorities' efforts to step up tax collection during a tough time.

However, the figure for the first seven months declined on a year-on-year basis, which the ministry attributed to weak business profits, tax cuts and rising export rebates amid the economic slowdown.

Fiscal expenditure in July rose 9.3 percent from a year earlier to 498.57 billion yuan. In the first seven months fiscal expenditure climbed 23.5 percent to 3.389 trillion yuan.

The government unveiled a 4-trillion-yuan stimulus package in November last year to be spent over the next two years to shore up the economy, with 1.18 trillion yuan coming from the central budget.

From January to July, 110.3 billion yuan was spent on farming, forestry and fishing sectors, up 59.4 percent year on year; 22.2 billion yuan on environmental protection, up 55.9 percent; and 57.84 billion yuan on transportation, up 50.8 percent.

China was facing great fiscal pressures, despite three months of increases, the ministry said. The global economic downturn resulted in falling business profits in China, which reduced fiscal revenue, while the government had had to ramp up spending to stimulate growth.

The ministry made clear in July its stance of sticking to a proactive fiscal policy in the second half of this year to sustain economic growth. Premier Wen Jiabao reaffirmed over the weekend that there would be no change in the macroeconomic policies the government had put into place to boost economic growth.

Fiscal revenue in the first seven months fell 0.5 percent from a year earlier. And the government has set the target of an 8 percent annual growth in fiscal revenue for 2009.

An Tifu said it depended on economic development in the second half of this year if China could achieve the 8 percent target.

"Now it is evident that Chinese economy is on the path to recovery and will continue to improve in the second half, which will lay a foundation for achieving the target," he said.

Bai Jingming, vice director of the Research Institute for Fiscal Science of the ministry, said fiscal revenue would continue growing in the second half as the global economic situation was improving.

New investment projects started at the end of last year and during the first half, as well as the new tax collection rules, would contribute to fiscal revenue in the second half, he said.

The government announced in June tax on cartons of cigarettes costing 70 yuan or more would rise to 56 percent from 45 percent, and tax on cigarette cartons costing less than 70 yuan would rise from 30 to 36 percent.

In July, China issued new regulations about how liquor makers pay alcohol consumption tax, setting a minimum price for baijiu. The rules took effect on August 1.

Fiscal revenue includes taxes as well as administrative fees and other government income, such as fines and income from state-owned assets.

(Xinhua News Agency August 12, 2009)