China's Stamp Tax Revenue Surges 88.8% in Jan-May Amid Active Markets

BEIJING, June 23 (CNA) - China's stamp tax revenue from securities transactions surged 88.8% in the first five months of this year, driven by an active capital market, according to data from the Ministry of Finance. Meanwhile, domestic consumption tax revenue fell 3.1% year-on-year, and corporate income tax revenue saw a slight increase of 0.2%, reflecting pressure on household consumption and corporate profits.

The Ministry of Finance released the latest statistical data for January to May this year.

The data shows that national general public budget revenue increased by 4% year-on-year from January to May, with national tax revenue up 4.4% and non-tax revenue up 2.2%. Breaking down central and local government finances, central general public budget revenue increased by 5.7% year-on-year, while local general public budget revenue at the local level increased by 2.7%.

Observing the main tax revenue items from January to May, domestic value-added tax revenue increased by 6.2% year-on-year, domestic consumption tax revenue decreased by 3.1%, corporate income tax revenue increased by 0.2%, individual income tax revenue increased by 12.2%, and stamp tax revenue increased by 35.8%. Among these, stamp tax revenue from securities transactions surged by 88.8%.

The downturn in China's real estate industry is reflected in tax revenue items, with deed tax revenue related to property sales and transfers falling by 14.8% year-on-year, and land value-added tax revenue decreasing by 14.2%.

National government fund budget revenue decreased by 19.2% year-on-year from January to May. Breaking down central and local government finances, central government fund budget revenue increased by 10.5% year-on-year, while local government fund budget revenue at the local level decreased by 23.2%. Among these, revenue from the transfer of state-owned land use rights dropped significantly by 28.7%.

The sluggish performance of China's national government fund budget revenue is primarily due to its high reliance on land finance. The downturn in the real estate industry and the continuous decline in land sales revenue for local governments have dragged down national government fund budget revenue.

A report by Caixin.com on the 23rd analyzed that the active capital market, coupled with tax growth in sectors like technology and strengthened tax compliance for high-income earners by tax authorities, contributed to the increase in individual income tax. The relatively weak growth in domestic consumption tax and corporate income tax revenue reflects the current pressure on household consumption and corporate profits.

Huang Lixin, director of the Research Institute of Tax Science of the State Taxation Administration, stated in a First Financial report that the three main reasons for the relatively rapid growth in individual income tax revenue this year include the active capital market, faster tax growth in some industries, and strengthened tax compliance for high-income individuals by tax authorities. The active capital market contributed nearly 50% to the growth of individual income tax. (Editor: Lu Jia-rong) 1150623

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