China’s fiscal revenue growth decelerated in July as low base effect faded, fiscal spending fell at slower pace
DATA
China’s fiscal revenue growth decelerated in July as low base effect faded, fiscal spending fell at slower pace
DATA

China’s fiscal revenue growth decelerated in July as low base effect faded, fiscal spending fell at slower pace

 

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China’s fiscal revenue grew by 1.9% in July from a year earlier, slowing by 3.7 percentage points from the previous month, according to data released by the Ministry of Finance.

In breakdown, tax revenue increased by 4.5%, slowing sharply by 9.1 percentage points, while non-tax revenue slid by 14.9%, extending the downtrend since April and widening by 0.9 percentage points from the drop in June, showed the data.

The slowdown in the fiscal revenue and tax revenue was mainly due to the end of low-base effect in previous months. The implementation of the policy to return value-added tax to the manufacturing sector and small companies, mostly in April and May last year, led to low comparison base.

According to the data, China’s domestic value-added tax revenue grew by 34.4% in July from a year earlier, slowing sharply after the tax revenue grew by five times in April, 4.8 times in May and 1.1 times in June. 

Corporate income tax slid by 16% year over year in July, narrowing by 5.2 percentage points from the previous month, while personal income tax declined by 0.8%, showed the data.

Tax revenue related to real estate and the land market remained weak in July, but improved slightly from the previous month. Deed tax fell by 2% yer over year and farmland occupancy tax dropped by 20.4%, narrowing by 6.6 percentage points and 20.7 percentage points from the previous month. Property tax, land value-added tax and urban land use tax returned to growth, rising by 20.1%, 0.2% and 1.3%, respectively. 　　

Vehicle purchase tax rose by 25% on year in July due to a low base last year, accelerating by 5.3 percentage points from June. Stamp duty returned to growth, rising by 27%, while resource tax continued to decline, down by 19.8%, expanding by 0.4 percentage points from June.

The data also showed that the Chinese government’s fiscal spending declined at slower pace, down 0.8% in July from a year earlier, narrowing by 1.8 percentage points from the previous month.

The total fiscal spending in the first seven months of the year accounted for 55.1% of the full-year budget, faster than the average pace during the pandemic, but slower than the 58.6% seen in the same period in 2019, showed calculations based the finance ministry’s data.