Mid-Year Economic Observation: Increases, cuts taxes, stabilizes the broader market, China's fiscal revenue inflection point has come

　　China News Agency, Beijing, July 25th: The inflection point of China's fiscal revenue has been increased by increasing expenditure and reducing taxes

　　China News Agency reporter Zhao Jianhua

　　In June, as the epidemic eased, the growth rate of fiscal revenue, an important indicator of China's economic operation, turned from negative to positive.

Fiscal and taxation experts judged that the inflection point of fiscal revenue in the first half of the year has been reached, and it will gradually recover in the second half of the year. The active fiscal policy has helped the market to stabilize.

　　According to data released by the Ministry of Finance recently, after deducting the factor of tax rebates, the national fiscal revenue in the first half of the year increased by 3.3% year-on-year, and decreased by 10.2% according to the natural caliber.

The tax revenue, which accounts for more than 80% of the fiscal revenue, increased by 0.9% after deducting the factor of tax rebates, and decreased by 14.8% according to the natural caliber.

　　Among them, in June, after deducting the factors of tax rebates, the national fiscal revenue increased by 5.3%, and the growth rate changed from negative to positive; calculated on a natural basis, it decreased by 10.5%, and the decline rate was significantly narrowed.

Feng Qiaobin, deputy director of the Macroeconomic Research Department of the Development Research Center of the State Council, believes that the bottom of the economic operation has passed, and it is back on the track of normal growth.

In general, the inflection point of fiscal revenue in the first half of the year has been reached.

　　In the first half of the year, three major factors affected fiscal revenue - the impact of the epidemic, international geopolitical changes, and monetary policy tightening in Europe and the United States.

In addition, tax cuts and fee reductions, including large-scale value-added tax credits and refunds, have also caused revenue and expenditure pressures on finance, especially local finance.

Among them, only the value-added tax credits and refunds amounted to 1,845.5 billion yuan (RMB, the same below) in the first half of the year, 2.9 times that of last year.

During this period, the fiscal revenue of some provinces and cities declined.

　　Despite the pressure, the proactive fiscal policy will continue to exert its force, making every effort to stabilize growth and protect against the epidemic.

Luo Zhiheng, chief economist of Yuekai Securities, analyzed that through large-scale tax reduction, fee reduction and tax rebate, speeding up the issuance and use of special bonds, increasing transfer payments to local governments, promoting anti-epidemic relief, alleviating the operating pressure of market players, and hedging total sales. Insufficient demand, opening up supply channels, and proactive fiscal policies have contributed to stabilizing the overall economic market.

　　Proactive fiscal policies, including tax cuts and fee reductions, have played an important role.

It has quick effect and short policy transmission time, and the finance can directly expand the total economic demand through infrastructure investment; through interest discounts, guarantee subsidies, leveraging more social capital, and the leverage effect of monetary and industrial policies is strong.

As of the end of June, 3.41 trillion yuan of new special bonds have been issued in various regions, and the quota of new special bonds for project construction in 2022 has basically been issued.

From January to June, the newly issued special bonds supported more than 23,800 projects, and the market-based supporting financing of special bond projects exceeded 530 billion yuan, driving effective investment.

　　Taxes and fees were cut and expenditures increased. In the first half of the year, fiscal revenue and expenditure were tight.

But these pressures have paid off on thousands of market players.

　　According to the big tax data released by the State Administration of Taxation, in the second quarter, the national enterprises enjoying tax rebates, purchasing raw materials and other expenditures were 5.7 percentage points higher than those without tax rebates, and the sales revenue of enterprises was 1.8 percentage points higher than that of enterprises without tax rebates.

Among them, the growth rate of equipment investment of manufacturing enterprises was 9.5 percentage points higher than that of enterprises without tax rebates, and the growth rate of sales revenue of high-tech enterprises was 1.8 percentage points higher than that of enterprises without tax rebates.

　　This year, China has implemented a new combined tax and fee support policy, including tax rebates, which has increased corporate cash flow and boosted business expectations and confidence.

With the implementation of a series of policies and measures to stabilize growth, the economy is expected to gradually recover and maintain steady growth.

In the second half of the year, as the tax rebate policy and other factors have weakened the impact on income, Xing Li, vice president of the Chinese Academy of Fiscal Sciences, predicts that the national fiscal revenue will resume stable growth in the second half of the year.

　　Luo Zhiheng believes that in the second half of the year, the pressure on grassroots financial revenue and expenditure will be eased.

However, in the future, the government still needs to maintain a certain amount of expenditure.

In the short term, the need for fiscal support to stabilize economic growth is still great, and fiscal policy must maintain a moderate continuity, which will test the ability of fiscal sustainability and intertemporal adjustment.

(Finish)