China July Fiscal Revenues Rise, But M/M Spending Pace Drops

     BEIJING (MNI) - China's fiscal revenues rose in July on a lower comparison

base and rising prices for some commodities, according to data issued by the

Ministry of Finance on Friday.

     The MOF said fiscal revenues rose 11.1% year-on-year to CNY1.65 trillion in

July, compared with 8.9% growth in June and a 3.3% increase last July.

     The MOF attributed the acceleration mainly to a lower comparison base in

the same period of last year and higher commodity prices.

     The main sub-indexes, including revenue from China's value-added tax (VAT),

resources tax, consumption tax and VAT on imported goods, and individual income

tax all improved, the MOF said.

     Revenue from VAT in July rose 18.8% year-on-year to CNY503.2 billion,

compared with just 2.2% growth in the first half year of the year, as the

influence on tax collection from the program to replace the business tax with a

value-added tax, fully implemented from May 2016, has ended, the MOF noted. 

     Resources tax revenue soared 54.9% to CNY10.4 billion, much higher than the

9.1% decrease last July but lower than a jump of 58.9% in the first six months

of this year. Rising prices of some mineral commodities was the main

contributor, the MOF said, although it did not specify the commodities.  

     Revenue from VAT and consumption tax on imported goods jumped 22.5% to

CNY131.2 billion in July, compared with a 5.3% decline in July 2016, although

the July jump was lower than the 34% growth recorded in the first half of the

year, the MOF said.

     Individual income tax revenue rose 17.6% year-on-year to CNY89.9 billion,

compared with a 7.2% increase last July. 

     Property tax revenue, mainly from tax imposed on commercial properties,

jumped 27.1% to CNY26.1 billion from 9.5% last July and 18.8% in the

January-June period.

     "The increase is related to the active performance of the commercial

property market, as the residential house market is shrinking under the strict

restriction," Yan Yuejin, research director of E-house China R&D Institute, told

MNI. 

     However, corporate income tax revenues dropped 1% to CNY448.9 billion due

to the high base, compared with 14.1% growth last July, the ministry noted. 

     Local and central government revenues both showed substantial rises,

although they diverged compared with the same period last year, the MOF said.

Central government revenues increased 9.6% to CNY850.9 billion, 0.2 percentage

points lower than last July's 9.8%, while local government revenues rose 12.8%

to CNY794.8 billion, compared with a 3% decline last July.

     On a year-to-date basis, fiscal revenues rose 10% to CNY11.08 trillion in

the first seven months, compared with 6.5% growth in the same period last year.

Central government revenues increased 9.6% to CNY5.24 trillion, higher than the

4.4% rise last year, while local government revenues surged 10.4% to CNY5.84

trillion, compared with an increase of 8.3% last year.

     China's fiscal spending in July, meanwhile, rose 5.4% year-on-year to

CNY1.35 trillion, compared with 0.3% growth during the same period last year and

a 19.1% jump in June, as expenditures by both local and central governments

increased, the MOF said.

     Central government spending increased 6.3% year-on-year to CNY232.8

billion, compared with a decrease of 7.4% in the same period last year, while

local government spending rose 5.2% to CNY1.12 trillion, compared with an

increase of 2% last July.

     For the first seven months, fiscal spending rose 14.5% to CNY11.70

trillion, higher than the 13% growth during the same period last year, the MOF

said.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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