China’s fiscal revenue picked up in Sept, non-tax revenue grew fastest since Oct 2019
DATA MACRO
China’s fiscal revenue picked up in Sept, non-tax revenue grew fastest since Oct 2019
DATA MACRO

China’s fiscal revenue picked up in Sept, non-tax revenue grew fastest since Oct 2019

 

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China’s fiscal revenue grew 8.4% in September from a year earlier, accelerating from the 5.6% gain in August, according to data released by the Ministry of Finance on Tuesday.

In breakdown, tax revenue rose only slightly by 0.4% on year, slowing from the 0.7% growth in the previous month, while non-tax revenue surged by 39.7% from a year earlier, accelerating by 6.2 percentage points from August, marking the fastest growth since October 2019, showed the data. 

The country’s fiscal revenue declined continuously in the second quarter of the year due to the impact of Covid outbreaks and the policy for value-added tax refund. As the value-tax refund largely ended in June, fiscal revenue improved in July, returned to growth in August and accelerated in September.

Revenue from value-added tax grew by 6.7% in September from a year earlier, picking up from 5.7% growth in August. Personal income tax grew by 11.2% on year, accelerating by 2.4 percentage points from the month before.

Revenue from other taxes slowed or declined last month. Corporate income tax declined by 12.2% year over year in September, expanding by 9.2 percentage points from the drop in August, and domestic consumption tax fell by 4.4%, compared yo 5.2% growth in the previous month, according to the data.

Vehicle purchase tax plunged 33.6%, expanding by 9 percentage points from August, due to the government’s move to cut purchase tax for some passenger vehicles. Stamp tax tumbled 47.2%, expanding by 8.6 percentage points from the month before.

Taxes related to the real estate and land markets improved slightly in September, though remain at low levels. Deed tax and township land use tax fell by 11.9% and 2%, respectively, narrowing by 19.1 percentage points and 16.2 percentage points from the August. Land value-added tax, property tax and farmland occupation tax retuned to growth, rising by 1.9%, 3.9% and 1%, respectively.

The 40% growth in non-tax revenue last month came after local governments took multiple measures to increase revenue including disposing of idle properties, mining rights and other state-owned resources and assets. In the first three quarters of the year, non-tax revenue grew by 23.4% year over year, compared to 11.6% drop for tax revenue in the same period.

Government revenue from land sales fell 26.4% on year in September after a 4.9% drop in August, amid the ongoing cash crunch in the real estate sector and weak property market sentiment.

Fiscal spending grew by 5.4% on year in September, slower than the 5.6% growth in August, according to the data.