BEIJING (Reuters) – China’s tax revenue growth slowed in the January-May period, finance ministry data showed on Thursday.
Tax collections, after excluding value added tax rebates (VAT), increased by 2.9% year on year in the first five months to 8.67 trillion yuan (US$1.29 trillion). However, the result was slower than the 5% increase seen in January-April.
According to Reuters’ calculations based on official data, tax revenues in May alone shrank by 32.5% compared to the previous year.
Revenue from government land sales fell 24.03% in the fourth month in May, as real estate agents were wary of land purchases.
According to data from the Ministry of Finance, financial expenditures increased by 5.9% year-on-year in the first five months to reach 9.91 trillion yuan.
China’s economy showed signs of recovery in May after falling the previous month as industrial production unexpectedly increased, but consumption was still weak.
The cabinet pledged to increase annual tax cuts, including VAT credit rebates, from an initial value of 2.5 trillion yuan to 2.64 trillion yuan to spur growth.
Tax cuts and collective Covid testing spending have put pressure on local government tax revenues and spending.
(Reported by Ellen Zhang, Gao Liangping, and Kevin Yao)
source: Noticias
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