China’s fiscal revenue grew at slower pace in Jun due to base factor, fiscal spending declined for the first time this year
DATA MACRO
China’s fiscal revenue grew at slower pace in Jun due to base factor, fiscal spending declined for the first time this year
DATA MACRO

China’s fiscal revenue grew at slower pace in Jun due to base factor, fiscal spending declined for the first time this year

 

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China’s fiscal revenue reached grew by 5.6% in June from a year earlier, according to the data released by the Ministry of Finance, slowing sharply from the 70% growth in April and 32.7% growth in May, due to base factors.

In the first half of the year, China’s fiscal revenue grew by 13.3% from a year earlier, showed the data.

In breakdown, tax revenue grew by 13.6% year over year, in June slowing by 28.4 percentage points from May, while non-tax revenue declined further by 14%, expanding by 6.2 percentage points from May and falling for the third consecutive month, showed the data.

The sharp slowdown in fiscal revenue in June was mainly due to changes in base factors. China launched a large-scale value-added tax return last year, mostly conducted in April and May, leaving a low comparison base in the two months, but the low base effect eased in June. China’s value-added tax revenue grew by 1.1 times in June from a year earlier, sharply slower than the 5 times growth in April and 4.8 times growth in May.

Among other taxes, corporate tax revenue slid 21.2% on year in June, expanding by 3.8 percentage points from May; domestic consumption tax returned to growth, up by 8.5%; personal income tax grew by 4%, accelerating by 0.9 percentage points from May, showed the data.

Vehicle purchase tax revenue grew by 19.7% on year in June, slowing by 2 percentage points from May, likely due to weaker auto sales; stamp duty revenue slid 14.7%, expanding by 2.9 percentage points.

Revenue from taxes related to land and real estate declined across the board. Deed tax revenue fell by 8.6% in June from a year ago, compared to positive growth in May, indicating falling real estate activities. Land value-added tax and farmland occupancy tax revenue fell at faster pace, slumping 27.6% and 41.1%, respectively; property tax revenue and urban land use tax revenue tumbled 18% and 23.9%, though narrower than the previous month.

Land sales revenue declined at faster pace, falling by 24.3% in June from a year ago, expanding by 11.2 percentage points from May. For the first half of the year, land sales revenue declined by 20.9% year over year.

China’s fiscal spending fell by 2.5% in June from a year earlier, falling for the first time this year. The government’s fiscal spending in the first half accounted for 48.7% of the full-year budget, faster than the past three years, but slower than the 52.5% in the same period in 2019.