(Yicai) March 22 -- China’s revenue from personal income tax plunged 15.9 percent in January and February from a year ago, mainly due to the fact that year-end bonuses, which are normally awarded at the Lunar New Year, were paid later this year than last year and thanks to increased tax initiatives, according to the latest data.

The nation raked in CNY326.2 billion (USD45.1 billion) in personal income taxes in January and February, the Ministry of Finance said yesterday. Total tax revenue tumbled 4 percent to CNY3.8 trillion (USD526 billion), dragging down the national general public budget revenue by 2.3 percent to CNY4.5 trillion.

The big decline in personal income tax revenue in the first two months was mainly because the year-end bonuses were paid later this year than last year, Luo Zhiheng, chief economist of Yuekai Securities, told Yicai. Taxes on year-end bonuses did not reflect in the treasury until March 15, whilst they reflected in February last year.

In August last year, China raised the tax exemptions on children’s education, elderly care and childcare by CNY1,000 (USD138) a month, which saved taxpayers an additional CNY39.2 billion (USD5.4 billion), according to the State Taxation Administration. Therefore, the personal income tax haul that year dropped 1 percent from 2022.

Personal income tax revenue should jump 6 percent this year from 2023 to around CNY1.6 trillion (USD221 billion) thanks to the economic recovery and growth in household income, according to a budget report released at the Two Sessions, the country’s annual policy setting meetings, earlier this month.

Editors: Dou Shicong, Kim Taylor