China's total tax revenue dropped 9 percent year-on-year last month, continuing with the declining momentum in October, which may dampen the country's ambitious stimulus plan to tackle the global financial crisis, according to a report published by the Economic Observer newspaper today citing insiders.

Tax revenues may continue to dip further in December, the report said, citing an anonymous Ministry of Finance official.

The central government unveiled a 4-trillion-yuan ($586 billion) stimulus package on Nov 9 to expand domestic demand, in which the central government would contribute 1.18 trillion yuan in the next two years. Currently, China's local investment packages have reportedly amounted to 18 trillion yuan.

In October, China registered a 0.3 percent year-on-year drop in tax revenues, the first time in a single month this year, the report said.

Analysts attributed the declining tax revenue to the country's economic slowdown and the global financial turmoil.

According to the report, the State Administration of Taxation has ordered local taxation departments to strengthen management to achieve this year's goals. The Ministry of Finance also called for increasing tax revenues and cutting expenditures to ensure meeting fiscal revenue targets.

In the first half of this year, China's tax revenue surged 31 percent compared with the same period of last year. But the year-on-year growth fell to 11 percent in August, 31.9 percentage points lower than a year ago. The year-on-year tax revenue growth in September plummeted to 2.5 percent.

Statistics from the Ministry of Finance show that tax revenues account for more than 96 percent of China's fiscal revenues.