BEIJING: Driven by a turnaround in property market, China’s fiscal revenue growth improved in the first two months of this year.
National fiscal revenue growth grew 6.3 percent year-on-year hitting 2.74 trillion yuan（$420 billion）, up from 5.8 percent in 2015, the Finance Ministry’s data showed on Wednesday. Central government’s revenue grew 1.6 percent, while regional and local government revenue rose 10 percent, up from 4.8 percent in 2015.
The growth in local government revenue was attributed to strong growth in business tax on housing transaction, which surged 20.2 percent compared to a year ago. This revenue goes to the local government’s coffer. The first two months of this year saw a 28.2 percent surge in property sale.
The upsurge in individual income tax also helped. The Chinese lunar new year fell on early February, earlier than that of 2015, so most of companies disbursed year-end bonuses in February, instead of March in 2015. The bonus binge helped boost the growth of individual income tax up to 22.3 percent.
However, duties and taxes on the export and import sector slumped 18.7 percent to that of a year ago due to a plunge in trade over the same period. A sluggish stock market caused a 9.9 percent drop in stamp duties on securities trade.
Land sale, an important revenue source for local governments, posted zero growth, ending a 21.4 percent contraction last year, thanks to a warm-up in property sales.