According to recent information from the State Administration of Taxation, since the Politburo meeting on September 26 last year deployed and implemented a comprehensive package of incremental policies, combined with the effectiveness of existing policies, both invoice sales and tax revenue growth rates have steadily rebounded. Notably, major industries and tax categories have all achieved stable growth, capital market-related taxes have maintained relatively high growth rates, and consumer vitality continues to be released, with China's positive economic momentum becoming increasingly consolidated.
Specifically, VAT invoice sales and tax revenue growth rates have steadily rebounded, reflecting stable and progressive economic performance. Over the past year, as series of existing and incremental policies have continued to take effect, market confidence has significantly strengthened, and economic improvement has driven both VAT invoice sales and tax revenue growth rates to show a steady upward trend.
From the perspective of invoice sales revenue, from the third quarter of last year to the third quarter of this year, quarterly sales revenue growth rates for national enterprises were 0.4%, 2.6%, 2.1%, 3.1%, and 4.4% respectively, showing an overall steady upward trend. In terms of tax revenue, in October last year, tax authorities' organized tax revenue (before export tax rebates) turned positive after seven consecutive months of negative growth. Since February this year, there have been eight consecutive months of positive growth with cumulative increases rising month by month. The first, second, and third quarters showed year-on-year changes of -0.4%, +2.6%, and +6.9% respectively, effectively fulfilling the role of raising fiscal revenue.
The relatively high tax revenue growth in the third quarter of this year, particularly in September, was driven not only by economic improvement but also by narrowing PPI declines and a relatively low base from the same period last year, which correspondingly contributed to tax revenue growth.
The Politburo meeting emphasized "efforts to revitalize capital markets." Over the past year, as various policy measures have been implemented, capital market trading has become active. Capital market service industry taxes increased by 56.8% year-on-year, with securities transaction stamp duty growing by 110.5%. Industries and tax categories related to capital markets have experienced rapid revenue growth, such as insurance industry taxes increasing by 13.3%. Meanwhile, equity transfers and listed company dividends have increased, with personal income taxes from equity transfers, restricted stock transfers, and interest and dividend income growing by 12.4%, 77.7%, and 11.3% respectively, driving personal income tax growth of 9.3%.
From the perspective of major industries and tax category revenue growth, corporate operations and profit conditions have continued to improve. Over the past year, as the economy has recovered and improved, corporate operating conditions have significantly enhanced, with major industries and tax categories maintaining stable growth.
Among major industries, manufacturing tax revenue increased by 5.4% year-on-year, accounting for 31% of total tax revenue, with its revenue increase representing 48% of total revenue growth, demonstrating its clear "ballast stone" role. Information transmission, software, and information technology services, as well as scientific research and technical services industries, saw tax revenue increases of 15.3% and 13.2% respectively, reflecting positive development in emerging industries. Steel and non-ferrous metals industries recorded tax revenue increases of 7.5% and 24.2% respectively, with prices of bulk commodities like steel and non-ferrous metals also showing stabilization and recovery.
Among major tax categories, domestic VAT increased by 3.2% year-on-year, reflecting improved corporate operations, while corporate income tax grew by 4.1%, indicating continuous improvement in profit conditions for enterprises in certain industries.
Simultaneously, nationwide corporate equipment upgrades have accelerated, and consumer goods trade-in policies have continued to release consumer vitality. Large-scale equipment renewal and consumer goods trade-in policies have maintained positive effects, driving accelerated corporate equipment upgrades nationwide and further boosting corporate equipment renewal momentum and confidence, with home appliance consumption "heating up."
VAT invoice data shows that over the past year, national corporate procurement of machinery and equipment increased by 9.7% year-on-year, with high-tech manufacturing procurement of machinery and equipment growing by 11.8%, maintaining good growth momentum. Retail sales revenue for daily household appliances like refrigerators and home audio-visual equipment like televisions increased by 55.4% and 35.3% respectively year-on-year.
Xu Sheng, member of the Academic Committee and researcher at the Economic Research Institute of the National Development and Reform Commission, stated that the comprehensive incremental policy package deployed at the September 26 Politburo meeting last year represents counter-cyclical, combined, and targeted adjustments to address China's phased economic challenges, focusing on promoting consumption and benefiting people's livelihoods, activating capital markets, and other objectives. Its policy effectiveness has been directly demonstrated in VAT invoice sales data and tax revenue data.
"Taxation is the 'barometer' of the economy, and the multi-dimensional changes in tax data clearly outline the evolutionary trajectory of incremental policy implementation and effectiveness," said Chen Binkai, Vice President of Central University of Finance and Economics. He believes that the implementation of comprehensive incremental policies combined with existing policy implementation, with invoice data growth steadily rebounding, reflects stable and positive economic performance, gradually improving corporate profitability, and continuously released consumer vitality. Together with factors such as active capital market trading this year, this has effectively driven stable tax revenue growth.
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