On August 19th, the Ministry of Finance announced the fiscal revenue and expenditure situation from January to July 2025. Data shows that from January to July, the national general public budget revenue was 13583.9 billion yuan, a year-on-year increase of 0.1%. From January to July, the national general public budget expenditure was 1.60737 trillion yuan, a year-on-year increase of 3.4%. It is worth mentioning that the general public budget revenue in July increased by 2.6% year-on-year. The 2.6% growth rate is not only hard won, but also has profound significance, "Tao Chuan, Chief Economist of Minsheng Securities Research Institute, said in an interview. Tao Chuan's analysis pointed out that the hard won achievement lies in the fact that this is the highest growth rate of public fiscal revenue since the beginning of this year, and the tax revenue in July has seen a significant improvement; The profound significance lies in the fact that compared to the structurally differentiated economic data shown in July, fiscal data that is less affected by extreme weather and natural disasters seems to better highlight the "underlying color" of the current economic operation. Public fiscal revenue reached its highest growth rate since the beginning of this year, with a significant rebound in revenue growth in July. The general public budget revenue in July increased by 2.6% year-on-year, with a growth rate 3.0 percentage points faster than the previous month. Among them, the growth rate of tax revenue accelerated by 4.0 percentage points to 5.0% compared to the previous month, driving the overall acceleration of the growth of general public budget revenue; Non tax revenue decreased by 12.9% year-on-year, with the decline widening by 9.2 percentage points compared to the previous month. Who is the main force behind the improvement of tax revenue in July? Wen Bin, Chief Economist of Minsheng Bank, believes that among the main tax categories, consumption tax, corporate income tax, personal income tax, and stamp duty are the main supporting items. The year-on-year growth rate of consumption tax increased from 2.0% last month to 5.4%, reflecting the warming of optional consumption driven by the summer holiday effect; The corporate income tax has increased from 2.7% to 6.4%. With the implementation of policies to expand domestic demand and combat internal competition, as well as the improvement in the efficiency of accounts receivable collection, industrial enterprise profits are moving towards substantial recovery; The personal income tax has increased from 6.8% to 13.9%, mainly due to the tightening of overseas stock trading income management by the tax department, which requires the payment of a 20% personal income tax on Hong Kong US stock investment income for 2022-2024; Stamp duty increased by 24.2% year-on-year, continuing the high growth trend. During the same period, the A-share market rose strongly, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index rising by 5.0%, 7.1%, and 10.0% respectively, and the market transaction activity significantly increased. However, domestic value-added tax and real estate related taxes have been a drag. The domestic value-added tax has decreased from 5.0% to 4.3%. Wen Bin believes that the main reason is the slowdown in the growth rate of industrial added value. In July, the added value of industrial enterprises above designated size increased by 5.7% year-on-year, a slowdown of 1.1 percentage points from the previous month. At the same time, it is also related to the marginal improvement of production material prices driven by anti involution and the corresponding narrowing of the value-added tax base. Real estate related taxes decreased by 3.8% year-on-year, reflecting that the real estate market is still in a state of oscillation and bottoming out. The sales area of commercial housing from January to July decreased by 4.0% year-on-year, an increase of 0.5 percentage points compared to January to June; Sales decreased by 6.5% year-on-year, an increase of 1 percentage point from January to June, both of which were the lowest growth rates of the year. In the view of Feng Lin, Executive Director of the Research and Development Department of Dongfang Jincheng, the overall economic data slowed down in July, but the growth rate of tax revenue accelerated, mainly due to factors such as price improvement, strengthening of personal income tax management, and stock market rise. The changes in the growth rate of value-added tax, consumption tax, vehicle purchase tax, non securities transaction stamp tax, real estate related deed tax, and land value-added tax are consistent with the trend of related economic activities. The expenditure structure is characterized by a focus on people's livelihood and a neglect of infrastructure. Driven by income, the year-on-year expenditure has further increased on the basis of a high base. The general public budget expenditure in July increased by 3.0% year-on-year, with a growth rate 2.7 percentage points faster than the previous month. The expenditure of the central general public budget at this level increased by 7.4% year-on-year, with the growth rate unchanged from the previous month; The year-on-year growth rate of local general public budget expenditure has turned from negative to positive, rising from -0.7% last month to 2.2%, and local expenditure has accelerated to catch up with the progress. In terms of sub items, the growth rate of livelihood expenditure has significantly accelerated, while the decline in infrastructure expenditure has narrowed. In terms of people's livelihood, the overall expenditure growth rate increased from 5.3% to 9.7%, with education, culture, tourism, sports and media, social security and employment, and health expenditure growth rates accelerating by 2.2, 3.8, 4.9, and 8.6 percentage points respectively compared to the previous month; In terms of infrastructure, the overall expenditure growth rate has rebounded from -8.8% to -3.8%, among which the growth rates of energy conservation and environmental protection, urban and rural communities, agriculture, forestry, water resources, and transportation expenditure have changed by -11.1, 10.9, 3.2, and 7.2 percentage points respectively compared to the previous month; In terms of science and technology, the growth rate of expenditure has decreased from 18.1% to -30.5%; In terms of debt interest payment, the growth rate of expenditure increased from -6.3% to 8.9%, and the proportion of general public budget expenditure remained the same as last month. In Feng Lin's view, the current structure of general public budget expenditure is characterized by a focus on people's livelihoods and a neglect of infrastructure. This is consistent with the recent decline in infrastructure investment growth rate, or may be related to the stable and strong economic trend in the first half of the year, and the decreasing demand for stable growth in infrastructure investment. In terms of government fund budget, the growth rate of revenue and expenditure has marginally slowed down. In July, the national government fund revenue increased by 8.9% year-on-year, with a significant drop of 11.9 percentage points from the previous month. The main reason is that the growth rate of revenue from the transfer of state-owned land use rights in the current month has significantly slowed down by 14.7 percentage points compared to the previous month, reaching 7.2%. The overall cooling of the land market in July, but the activity of the land market in first tier and core second tier cities remains high, supporting the continued rapid growth of land transfer revenue. ”Feng Lin said. However, Feng Lin pointed out that against the backdrop of continued decline in real estate sales and investment, the pace of land supply and acquisition in core cities has accelerated in stages, mainly due to some real estate companies replenishing their positions in key cities, which does not mean that the land market has shown a trend of recovery. In July, the issuance of new special bonds and special treasury bond continued to accelerate, supporting the high year-on-year growth of government fund expenditure. The national government fund expenditure for the month increased by 42.4% year-on-year, but the growth rate dropped significantly by 36.8 percentage points compared to the previous month. Among them, the expenditure on land transfer fees decreased by 4.1% year-on-year, and the growth rate slowed down by 10.0 percentage points compared to the previous month, which has a significant drag on the overall growth rate of government fund expenditure. Since July, the finance department has accelerated the introduction of policies and measures to boost consumption increment in accordance with the deployment of the Central Political Bureau meeting. While ensuring and improving people's livelihoods, it has enhanced residents' willingness and ability to consume, thereby better stimulating consumption potential and consolidating the "ballast stone" of economic growth. For example, establishing a childcare subsidy system can effectively reduce the cost of family childbirth and upbringing. On July 28th, the General Office of the Communist Party of China and the General Office of the State Council released the "Implementation Plan for the Parenting Subsidy System", which specifies that starting from January 1st this year, subsidies will be provided to infants and young children under the age of 3, including those born before January 1st, until they reach the age of 3. The subsidy standard is 3600 yuan per child per year. The policy is expected to help reduce the cost of raising families by about 90 billion yuan this year. In addition, the Ministry of Finance has made arrangements and issued relevant policies in areas such as gradually promoting free preschool education, providing financial subsidies for personal consumption loans, and implementing loan subsidies for service industry operators. Looking ahead to the next stage, Wen Bin believes that the government will continue to implement supportive policies to boost consumption. On the one hand, we will support key cities with a large population base, strong driving force, and good development potential to promote new forms, models, and scenarios of consumption, and create more new consumption hotspots; On the other hand, we will support China's international consumption center cities and some key consumption cities to carry out the construction of international consumption cities, improve consumer convenience and experience. (New Society)