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.