Jin said the impact of severe acute respiratory syndrome (SARS) epidemic on fiscal revenue became increasingly obvious as revenue growth fell and expenditures surged in the past two months.

Jin made a report to the ongoing session of the Standing Committee of the National People's Congress (NPC), the legislature of the country, on Wednesday.

He said fiscal revenue grew at a slower pace in April and May than in the first quarter of the year. In the meantime, increasing spending on public health and debt interest payment pushed up the growth of expenditure in the last two months.

He said the lag effect of SARS on fiscal revenue would show in the coming months as SARS-related tax incentives were fully realized. The difficulties of increasing fiscal revenue would grow greater in the latter half of the year.

One-off factors for fast growth in the first half of the year would disappear and the government would give more tax rebates to exporters and spend more on public health and emergency facilities.

But he said the Chinese government would adopt active measures to offset the negative impact of SARS and guarantee the achievement of the revenue target set by the budget.

(Xinhua News Agency June 25, 2003)