Fiscal Revenue Growth Eases to 7.2% in August

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Growth in China’s fiscal revenues fell significantly in August due to sizeable year-on-year declines in non-tax revenues compared to the same period in 2016.

Figure released by China’s Ministry of Finance indicate that national standard public budget revenues were 1.0652 trillion yuan for August, for a YoY rise of 7.2%, and deceleration of 3.9 percentage points compared to July.

The reading for national budget revenues in August marks the lowest rate of growth this year with the exception of May.

Central government standard public budget revenues saw year-on-year growth of 6.2% last month, while local government standard public budget revenues saw an increase 8.2%.

National tax revenues saw accelerated growth in August, rising by 16% year-on-year to lag behind only January-February in terms of value.

According to the Ministry of Finance the accelerating growth of national tax revenues is due to the stable and improving performance of the Chinese economy as well as price inflation.

In sharp contrast non-tax revenues saw a drop of 22.5% compared to the same period last year, when a high baseline was set.

Personal income tax revenues grew 18.7% in August to reach 86.8 billion yuan, for an acceleration of 1.1 percentage points compared to July. According to the Mo the chief reason this growth is increases in household earnings and share dividends.

Import value added tax and consumer tax grew 19.1% in August, while customs tax rose by 8.4%, for accelerations of 3.4 and 3.5 percentage points respectively compared to july.

Total national standard public budget revenue for the period from January – August increased by 9.8% year-on-year, while tax revenue increased by 11.6% to reach 10.3410 trillion.

Fiscal expenditure growth remains tepid, with national standard public budget expenditures rising only 2.9% year-on-year in August to reach 1.4647 trillion yuan, for a deceleration of 2.5 percentage points compared to July and the lowest rate of growth this year.

According to the Ministry of Finance the reason for the current low rate of growth in fiscal expenditures is that the schedule for acceleration had been previously implemented

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