High-tech sectors power tax revenue growth

China's tax revenue grew by 5.9 percent year-on-year in the first eight months, slightly outpacing the first-half economic expansion of 5.4 percent, underpinned by robust industrial sales, booming high-tech sectors and a strong capital market, latest data showed.

The State Taxation Administration said value-added tax invoice data revealed strong momentum across key economic sectors, providing a solid foundation for revenue growth. Industrial sales revenue increased by 7.3 percent year-on-year during the January-August period.

Within this broad sector category, mining, manufacturing and utility supply grew 8.3 percent, 7.5 percent and 5 percent, respectively. Equipment manufacturing acted as a major stabilizer, growing 10.1 percent, supported by computer and telecommunications equipment at 18.8 percent, instruments at 14.1 percent and electrical machinery at 14 percent.

High-tech industries also recorded a 15.7 percent sales surge. High-tech manufacturing jumped 18.9 percent, fueled by artificial intelligence-related fields such as integrated circuits and smart vehicle equipment, which soared by 67.7 percent and 38.8 percent, respectively.

The integration of digital technologies and the real economy continued to deepen, with sales revenue in core digital economy industries rising 9 percent. Specifically, digital product manufacturing and digital services grew by 16.6 percent and 11.1 percent, respectively. Enterprises nationwide increased their spending on digital technology procurement by 8.6 percent, while the manufacturing sector alone boosted such investments by 17.1 percent.

Furthermore, interprovincial trade accounted for 41.4 percent of total national sales, up 0.5 percentage point from a year earlier. This was supported by an 8.2 percent growth in interprovincial transport and logistics sales, highlighting the steady development of a unified domestic market.

While these solid economic fundamentals drove overall tax receipts, the 5.9 percent January-August revenue growth — which excludes customs-collected taxes and export rebates — was 0.5 percentage point higher than the GDP growth rate.

Huang Lixin, director of the Tax Science and Research Institute under the STA, attributed this slight gap primarily to price fluctuations, capital market activities and policy adjustments, adding that the tax growth generally matched the broader economic expansion and demonstrated economic resilience.

Specifically, a robust capital market significantly boosted tax collection without directly adding to current GDP. The daily average turnover of A shares reached 2.7 trillion yuan ($402 billion) in the first eight months, up 72.8 percent year-on-year. This drove an 82 percent surge in securities transaction stamp duties, a 59.7 percent rise in individual income tax from restricted share transfers and a 65.6 percent increase in securities sector tax revenue.

Insurance and other financial sectors also grew by 14.6 percent and 18.5 percent, respectively. In addition, the PPI turned positive in March — 2 percent over the eight-month period — lifting tax revenue calculated at current prices, whereas the GDP deflator stood at just 0.7 percent. Policy adjustments — including the Value-Added Tax Law and the standardization of outdated tax incentives — further increased revenue.

Behind the overall revenue growth, the contribution structure highlights the impact of targeted relief policies. Official figures show that the country's top 10,000 enterprises accounted for nearly half of total tax revenue, and the top 1 million contributed 90 percent. The remaining 10 percent came from other entities, primarily small and micro businesses.

Chen Binkai, vice-president of the Central University of Finance and Economics, explained that this distribution reflects extensive government efforts to alleviate the financial burden on smaller firms.

Preferential policies, such as exempting value-added tax for small-scale taxpayers with monthly sales under 100,000 yuan and reducing the effective corporate income tax rate to 5 percent for eligible small enterprises, have significantly lowered their tax obligations.

A spokesperson from the STA said the combined data reflect the economy's transition toward new growth drivers and an optimized structure, adding that the administration will continue to refine tax support policies to stimulate market vitality and promote high-quality development.