China’s fiscal revenue fell in Aug for first time this year, fiscal spending returned to growth, land sales revenue fell at faster pace
China’s fiscal revenue fell in Aug for first time this year, fiscal spending returned to growth, land sales revenue fell at faster pace

China’s fiscal revenue fell in Aug for first time this year, fiscal spending returned to growth, land sales revenue fell at faster pace

 

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China’s fiscal revenue declined in August from a year earlier as the low-base effect eased and revenue from land sales fell at a faster pace amid the real estate downturn, while fiscal spending returned to growth after two months’ contraction.

Fiscal revenue declined by 4.6% in August from a year earlier, marking the first drop so far this year, with tax revenue falling by 2.2% and non-tax revenue sliding by 15%, extending the downtrend since April, according to data released by the Ministry of Finance.

The decline in fiscal revenue was mainly attributable to fact that the easing low-base effects last year due to the policy of value-added tax rebates which were mostly in April – July in 2022. The data showed that the revenue from value-added tax grew by 1.8% in August from a year earlier, slowing sharply from the previous months.

Fiscal revenue from corporate income tax slid 16.8% year over year in August, widening by 0.8 percentage point from the drop in the previous month, while revenue from domestic consumption tax grew by 4.2%, slowing significantly by 10.3 percentage points from July, showed the data.

Revenue from personal income tax returned to growth, rising by 3.8% in August from a year earlier, revenue from vehicle purchase tax grew by 22.6%, slowing by 2.4 percentage points from July, while revenue from stamp duty slid 15.8%.

Due to the high base last year, non-tax revenue declined by 15% in August from a year earlier, showed the data.

On the spending side, China’s fiscal spending picked up in August, rising by 7.2% from a year earlier, after declining for two consecutive months.

Notably, the government’s revenue from land sales declined at a faster pace, sliding 22.2% in August from a year earlier, showed the data.