(Yicai Global) May 18 -- China’s general public budget revenue, which is mostly comprised of tax revenue, soared 70 percent in April from the same period last year due to the low base line in 2022 when substantial tax rebates and deferred payments were being offered to help struggling businesses.

The general public budget revenue, which makes up most of the country’s fiscal revenue, reached CNY2 trillion (USD296.4 billion) in April, according to data released by the Ministry of Finance today. Yet in the first three months, public budget revenue only advanced 0.5 percent year on year.

The government introduced large value-added-tax refunds in April last year to ease the liquidity pressure that many firms were under. The refunds amounted to CNY800 billion (USD114 billion) in April 2022 alone, leading to a huge drop in fiscal revenue that month.

But this year, the tax policy returned to normal and VAT revenue surged in April due to the low base line last year. Also, the payment window for deferred taxes that was introduced last year to help small manufacturers will close at the end of June. Companies are therefore paying off their taxes, driving the fast growth in fiscal revenue.

Public budget revenue surged 25.5 percent in the first four months from a year earlier to CNY7.8 trillion (USD1.1 trillion). When excluding the above-mentioned factors, growth stood at 4 percent, not much below the country's gross domestic product growth of 4.5 percent in the first quarter.

On the other hand, revenue from other taxes fell or grew at a slower rate in the four months ended April 30. There were double-digit cuts to consumption tax and VAT on imported goods, individual income tax dropped to 2.4 percent and the stamp tax on stock sales plunged 42.7 percent.

Government fund revenue, which is another component of fiscal revenue and mainly comes from the sale of land use rights, is also a major source of revenue for the government. This income tumbled 16.9 percent between January and April from a year ago to CNY1.4 trillion (USD199 billion). Land use sales amounted to CNY1.18 trillion of this, a dive of 21.7 percent year on year, but an improvement on the 27 percent drop in the first three months.

In April, revenue from selling land use rights had almost returned to where it was a year ago, indicating that policies introduced to stabilize the real estate market are taking effect.

Editors: Liao Shumin, Kim Taylor