Fiscal policy focuses on domestic demand

Updated: 2011-12-27 21:51


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BEIJING - Vice Premier Li Keqiang said that China will maintain a proactive fiscal policy next year with a focus on boosting domestic demand, structural tax reductions, and the improvement of people's livelihoods.

"We will make our fiscal policy more targeted, flexible, and foresighted and facilitate its fullest role in macro-economic control," Li said while attending a national finance work conference that concluded Monday in Beijing.

Li predicted a faster growth of fiscal expenditures for next year compared to this year. Government data showed the nation's fiscal revenues rose 26.8 percent year-on-year to top 9.73 trillion yuan ($1.54 trillion), while its fiscal expenditures went up 24.3 percent to 8.9 trillion yuan in the first 11 months of the year.

He said the nation will seek more balanced foreign trade while boosting domestic demand. It will also work to reduce tax burdens for small and micro-sized firms.

The State Council, or China's Cabinet, pledged in October stronger fiscal support for small and micro-sized businesses, which includes raising the tax threshold for levying corporate, value-added taxes and business taxes, extending a policy to halve their business income taxes by another four years, and forgiving banks' stamp tax on lending contracts with small firms for three years.

The Ministry of Finance also announced last month that the country will scrap the collection of up to 22 items of administrative fees from small and micro-sized companies during the January 1, 2012 - December 31, 2014 period. Such fees include charges of companies' registries and tax invoice purchases.

Li said more will be spent in 2012 on low-income earners, employment, education, social security, affordable housing and medical services.