Chinese counties improve fiscal strength

BEIJING - County governments across China are gradually improving their fiscal health and seeing relieved fiscal pressure, according to audit reports released by the National Audit Office (NAO) on Friday.

The improved fiscal health of the governments was mainly attributed to steps taken by central and provincial governments to boost fiscal revenues and ease the counties' fiscal crunch, the NAO said in a statement on its website.

However, non-tax revenues account for a large part of fiscal income for county-level governments, making the governments less flexible in terms of spending due to the designated use of those funds, the NAO noted.

Non-tax revenues collected last year accounted for 60.45 percent of government revenues in 54 counties in 18 provinces, autonomous regions and municipalities that were audited from November 2011 to March 2012, the NAO said.

According to the auditors, the fiscal revenues of counties include taxes, administrative fees, funds supported by the government, State-owned assets, income from selling resources and business income from State-owned capital.

The NAO warned that some counties have been relying too much on transfer payments by central and provincial governments for local spending.

During the auditing period, the NAO found that county-level governments waived a total of 7.04 billion yuan ($1.11 billion) in taxes or land sales for enterprises from 2008 and 2011, a move that was not in line with state policies.

Also, 13 cases of irregularities and disciplinary violations involving 29 officials were found during the auditing, according to NAO.

The officials have been handed over to law enforcement departments for further investigation, the NAO said.