Revenue from funds controlled by local governments reached 1.311069 trillion yuan, up 34.5%. This huge increase was mainly the result of the incorporation of all the income from the transfer of land-use rights into local budgets. Total revenue includes 1.037528 trillion yuan from the transfer of land-use rights and compensation for the use of new land for construction and 118.488 billion yuan from road maintenance fees. Total expenditures by local governments taken from the funds they control increased by 49.9% to reach 1.292798 trillion yuan. This figure includes 1.01725 trillion yuan in land-related expenditures which consists of 377.815 billion yuan as compensation for land requisition, housing demolition and resident relocation and subsidy grants to farmers for land expropriations, a large increase of 113% primarily attributable to the widespread increase in the level of compensation paid to farmers dispossessed of their land; and 128.622 billion yuan for developing and protecting farmland; 14.165 billion yuan for building low-rent housing; 36.988 billion yuan for developing rural infrastructure and developing and protecting primary farmland; 303.532 billion yuan for promoting urban development; and 156.128 billion yuan generated from the transfer of the land-use rights of bankrupt state-owned enterprises and those converted into joint stock companies and used to provide for their laid-off employees. A total of 117.344 billion yuan was spent in financing road maintenance.

Revenue from government-controlled funds was used exclusively for its intended purposes. The discrepancy between revenue and expenditures from these funds in 2008 arose primarily as a consequence of the requirement to roll over a portion of this revenue into this year in accordance with the measures for managing these funds.

Following is an overview of budget implementation and financial work in 2008:

1. Budgetary revenue growth and use of surplus revenue

Thanks to intensified efforts in revenue collection and management by tax, customs and public finance departments in addition to economic development, overall revenue growth was fairly rapid, though growth in the second half of the year was noticeably more sluggish. Thanks to rapid economic growth and good corporate performance in the first half of the year, plus special factors such as the 2007 surge in corporate profits, increase in corporate income tax receipts and the effect of tax policy adjustments, national revenue grew by 33.3%. None of these special factors were present in the second half of the year. Due mainly to the impact of the global financial crisis, economic growth slowed and corporate profits weakened. Following a big cut in the corporate income tax rate in 2008, a series of policies to reduce or exempt taxes and fees were introduced to strengthen and improve macro-control through management of public finance and promote steady and rapid economic growth. This led to the slower growth in national revenue. National revenue grew by 5.2% in the second half of the year, while revenue collected by the central government dropped by 0.9%.

Main revenue items in the central budget. Domestic VAT reached 1.349742 trillion yuan, up 16.3% and equivalent to 100.7% of the target. Domestic sales tax reached 256.78 billion yuan, a rise of 16.4% and equivalent to 104% of the target. VAT and sales tax on imports amounted to 739.107 billion yuan, up 20.1% and equivalent to 107.8% of the target. VAT and sales tax rebates for exports totaled 586.59 billion yuan, up 4.1% and equivalent to 102% of the target, which represents a decrease in revenue by the same amount. Business tax totaled 23.21 billion yuan, an increase of 14.5% and equivalent to 103.2% of the target. Corporate income tax registered 717.34 billion yuan, a rise of 27% and equivalent to 111.6% of the target, with the high increase mainly due to the large increase in corporate income tax in 2007. Individual income tax reached 223.418 billion yuan, up 16.9% and equivalent to 110.1% of the target, with the large increase mainly due to the growth of per capita disposable income for urban residents and improved collection and management. The securities transaction stamp tax reached 94.968 billion yuan, down 51.2% and equivalent to 48.8% of the target, with the shortfall due to a large decline in revenue triggered by the sluggish stock market, the reduction of the securities transaction stamp tax rate and the scrapping of the stamp tax on stock purchases. Tariffs hit 176.995 billion yuan, an increase of 23.6% and equivalent to 110.6% of the target, mainly due to the rapid growth of general imports. Non-tax revenue hit 170.451 billion yuan, up 23.6% and equivalent to 118.4% of the target, with the high increase mainly due to the increase in fees for mineral prospecting and mining rights and resource consumption charges as well as mineral resource compensation fees following reform of the system for paid use of resources.