China's central government saw its fiscal revenue growth slow down in 2012 and may struggle to meet this year's target[Hong Kong Company Formation], according to a report released yesterday.

Last year, the central government had a fiscal revenue of 5.62 trillion yuan (US$910 billion), an annual increase of 9.4 percent, according to a State Council report on the central government's final accounts for 2012.

In 2011, the central fiscal revenue jumped 20.8 percent from the previous year.

The slowdown was caused by low growth and a drop in tax revenue that went to the central treasury, according to a report submitted to the bi-monthly session of the Standing Committee of the National People's Congress, China's top legislature.

For instance, revenue from value-added tax in the domestic market only met 97.2 percent of the budgeted target because industrial performance was poor.

This year, the central government may be under great pressure to achieve the full-year target of 7-percent growth, Minister of Finance Lou Jiwei said.

In the first four months of the year, central fiscal revenue shed 0.8 percent from the same period last year, largely due to a slowdown in economic growth and structural tax cuts, according to the report.[Offshore Company Incorporation]

In the next few months, industrial output growth may continue to slow and enterprises may report less profits, which will dent fiscal revenue growth, Lou said.

A pilot program to replace the business tax with a value-added tax in some service sectors will be expanded to the whole country in August, which will likely reduce central government revenue, he added.

Since the beginning of last year, China has adopted a raft of tax-cutting measures to help alleviate burdens for businesses and individuals and serve the country's economic restructuring.

Last year, the central government's financial deficit stood at 550 billion yuan, roughly the same as the budgeted figure, according to the report.

The central government's spending totaled 6.41 billion yuan in 2012, an annual rise of 13.6 percent.

Although central fiscal revenue saw [HongKong Richful  - Hong Kong Company Formation, Offshore Company Incorporation]slower growth, the central government continued to increase spending on sectors directly linked to people's livelihoods, such as public housing, education and health services.