China's tax revenue growth broadly in line with economic expansion

BEIJING, Sept. 20 (Xinhua) -- China's tax revenue rose 5.9 percent year on year in the first eight months of 2026, data from the State Taxation Administration showed on Sunday.

The figures cover taxes collected by the tax authorities and exclude import value-added tax (VAT) and import consumption tax collected by customs, tariffs and tonnage tax.

"Tax revenue is calculated at current prices, and growth this year has generally kept pace with the economy," said Huang Lixin, an official with the administration.

China's gross domestic product grew 4.7 percent year on year at constant prices in the first half of 2026, while at current prices, it grew 5.4 percent -- slightly below the 5.9 percent tax revenue growth recorded for the first eight months.

Huang attributed the accelerated pace of tax growth to three main factors.

Prices are no longer a drag. China's producer price index, which measures costs for goods at the factory gate, ended 41 straight months of decline in March and turned positive. The index rose by 2 percent cumulatively over the first eight months of the year, helping to boost tax revenue recorded at current prices.

Capital market activity is boosting receipts. A more active stock market has driven up the securities transaction stamp tax by 82 percent, along with corporate income tax, personal income tax and domestic VAT tied to trading and investment gains.

Policy adjustments are also a key factor. As the country's VAT law and related regulations took effect this year, some tax policies were adjusted accordingly. At the same time, the country has tightened certain tax preferences that no longer align with high-quality development or current conditions, which contributed to higher tax revenue. Such policy adjustments, however, do not directly translate into GDP growth.

"Taken together, these factors lifted tax revenue growth slightly above GDP growth, but overall it remains broadly consistent with growth in the economy's tax source," Huang said. "That speaks to the resilience and vitality of China's economic development."

Chen Binkai, vice president of the Central University of Finance and Economics, said that in terms of who pays, tax revenue is mainly contributed by large enterprises, while small and micro businesses enjoy more tax and fee benefits.

Tax data show that in the first eight months, the top 10,000 taxpayers by amount paid accounted for nearly half of all tax revenue, and the top one million accounted for 90 percent, while the remaining enterprises, including small and micro businesses, made up only about 10 percent.

China has rolled out a series of preferential tax and fee policies for smaller firms in recent years. Small-scale VAT taxpayers with monthly sales below 100,000 yuan (about 14,810 U.S. dollars) are exempt from VAT, and eligible small low-profit enterprises face an effective corporate income tax rate of 5 percent.

"These policies have played an important role in reducing the tax burden on the vast number of small and micro enterprises," Chen added.