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THE DECLINE OF CHINA'S BUDGETARY REVENUE: REASONS AND CONSEQUENCES
Author(s) -
Lin S
Publication year - 2000
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2000.tb00043.x
Subject(s) - revenue , china , tax revenue , economics , government revenue , government (linguistics) , economic policy , public economics , monetary economics , business , finance , political science , linguistics , philosophy , law
The decline of the government revenue share in GDP has become a major concern for Chinese policy makers and many economists. This article analyzes the reasons and the consequences of low government budgetary revenue in China. It is argued that lowered corporate tax rates, small tax bases, and tax evasions are the main reasons for the decline of government revenue share in GDP. Low budgetary revenues have resulted in low budgetary expenditures and growing budget deficits, stimulated the expansion of extra‐budgetary and off budgetary revenues, and made the privatization of state enterprises more difficult. This article also discusses policy options for China.