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Amid Tax Cuts, Authorities Boost Nontax Revenues

By Cheng Siwei and Guo Yingzhe / Jul 18, 2019 03:34 PM / Economy

Photo: VCG

Photo: VCG

As tax and fee cuts hit China’s fiscal revenue growth, some of the country’s governments are reporting higher-than-usual revenues from nontax sources — including the sale of state-owned assets and sucking up more profits from state-owned enterprises (SOEs).

Southwest China’s Guangxi Zhuang autonomous region, for example, beefed up its revenues by selling off idle assets such as factories and land, Sun Liangquan, a regional finance official, told Caixin earlier this month.

Additionally, the central government collected 168.5 billion yuan ($24.5 billion) more from SOEs profits in the first half of 2019 than during the equivalent period last year, accounting for 62% of the country’s nontax revenue growth, Liu Jinyun, an official at the Ministry of Finance, said at a Tuesday press conference.

Despite an uptick in June, year-on-year growth in China’s fiscal revenue has slowed in recent months as tax cuts have taken effect and downward pressure on economic growth has risen. Some provincial-level governments even suffered a decline in fiscal revenue.

In March, Beijing promised to slash taxes and fees by nearly 2 trillion yuan this year, compared with cuts of 1.3 trillion yuan last year.

Read the full story later today on Caixin Global.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: In Depth: China’s Whopping Tax and Fee Cut Package Surprised Even Insiders

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