Govt's Jan-Aug revenue up 10% on VAT, lower base, recovery, growth hopes

Government revenue in China grew 10 percent year-on-year to 15.18 trillion yuan ($2 trillion) in the first eight months, the Ministry of Finance said on Friday.

Notably, tax revenue contributed 12.79 trillion yuan, up nearly 13 percent year-on-year. More striking was the contribution of domestic value-added tax at nearly 4.83 trillion yuan, up a staggering 71 percent year-on-year, mainly on a lower tax base of last year, when a substantial amount of VAT was retained or refunded, said the ministry.

Several factors helped boost the government's coffers, including the ongoing economic recovery and a general expectation that growth will pick up in the future, according to the ministry.

Implementation of the VAT retention and refund policy since April 2022 resulted in a concentrated refund activity that lowered the revenue base, the ministry said.