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China’s fiscal revenue saw its fastest growth this year last month, supported by stable economic expansion and increased income over the first seven months after a slowdown in the first half. In July, total public budget revenue—including taxes and non-tax income—climbed 2.6% from the previous year to reach CNY2 trillion (USD278.5 billion). For the January to July period, this total increased by 0.1% to CNY13.6 trillion (USD1.9 trillion).
Key economic indicators released by the National Bureau of Statistics indicated steady growth last month, although at a slower pace than in June. The value added by large industrial firms rose 5.7% year-over-year in July. Meanwhile, total retail sales of consumer goods increased 3.7%, down from 6.8% in June, and 4.8% in the prior month. Fixed-asset investment grew by 1.6% in the first seven months, after an increase of 2.8% in the first half of the year.
Recent years have seen China’s tax revenue growth lag behind overall economic performance, influenced by various factors such as tax cuts, price fluctuations, and structural changes in tax sources, according to Hu Jinglin, head of the State Taxation Administration.
Tax revenue, which accounts for the majority of fiscal income, declined slightly by 0.3% over the seven months ending July 31, totaling CNY11.1 trillion (USD1.5 trillion). However, July alone saw a 5% increase, with revenue reaching CNY1.8 trillion (USD250.6 billion). In detail, value-added tax revenue increased 3% over the same period; corporate income tax fell 0.4%; consumption tax rose 2.1%; and personal income tax surged 8.8%.
Additionally, land value-added tax and deed tax, both indicators of real estate market activity, dropped 17.8% and 15%, respectively. Conversely, stamp duty on securities transactions soared 63%, reflecting heightened stock market activity.
Although there are signs of recovery in fiscal income, China’s overall fiscal deficit continues to expand. Government spending in the public budget grew by 3.4% in the first seven months, reaching CNY16.1 trillion (USD2.2 trillion).
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