BEIJING (Reuters) – China’s tax revenue rose 1.3% in 2024 from a year earlier, a sharp slowdown from the 6.4% rise recorded in 2023, according to data released on Friday by the Ministry of Finance, as the prolonged collapse of the real estate market and slowing domestic demand weigh on the economy.
Tax revenue in 2024 totaled 21.97 trillion yuan ($3.03 trillion), including 17.497 billion yuan in tax revenue and 4.473 billion yuan in non-tax revenue, the data showed.
China’s tax revenue fell 3.4% in 2024 from the previous year, while non-tax revenue jumped 25.4%, the ministry said.
The recent rush by cash-starved local governments to impose one-off fines and confiscations on businesses, worsening already weak business confidence, has alarmed Chinese leaders.
In December, Premier Li Qiang said China should strengthen law enforcement supervision and pay attention to abnormal growth in fines and confiscation revenue, pledging to take measures to improve the environment business and build market confidence.
Non-tax revenue includes a wide range of sources such as administrative fees, fines and forfeitures as well as profits from state-owned enterprises.
Revenue from land sales by Chinese local governments fell 16% in 2024 from the previous year, highlighting the deep downturn in real estate. These revenues have in the past been a key driver of local economic growth measures and the sharp decline has been a major factor weighing on overall business activity.
Budget spending increased by 3.6% last year, compared to 5.4% in 2023.
China’s top leaders have pledged to adopt a more proactive fiscal policy this year as external headwinds loom with a second Trump administration.
China’s economy grew 5% last year, matching the government’s target, but lopsidedly, with many complaining of deteriorating living standards as Beijing struggles to transfer its industrial and export gains to consumers while controlling local government debt.
($1 = 7.2441 renminbi)