Event:
On May 17, 2022, the Ministry of Finance released the fiscal data for April. In April 2022, the general public budget revenue was - 41.3% year-on-year, which was - 4.9% year-on-year after deducting the tax rebate, and 3.4% year-on-year in March; The general public budget expenditure in April was - 2.0% year-on-year and 10.4% year-on-year in March; The budget revenue of government funds in April was - 34.4% year-on-year, and - 22.2% year-on-year in March; The budget expenditure of government funds in April was 12.5% year-on-year, and 69.1% year-on-year in March.
Core view:
In April, the epidemic superimposed tax cuts and rebates, and the growth rate of fiscal revenue turned negative significantly. Although the central transfer payment has greatly supplemented local financial resources, under the constraints of fiscal revenue reduction and epidemic control, the growth rate of fiscal expenditure is still negative, and the degree of development is lower than the market expectation. Considering that there is still surplus grain in the current finance, it is expected that the focus of the policy in the short term will still be to actively promote the resumption of work and production and accelerate the implementation of existing policies. It is expected that the incremental tools will not be launched in a hurry in the first half of the year.
The fiscal data of April obviously deviated from the market expectation and intuitive feeling. We analyzed it from the perspective of poor expectation and understood the signal conveyed by the fiscal data.
First: the growth rate of fiscal expenditure has turned negative, and the expected fiscal force has not come.
The weakening of fiscal expenditure is mainly related to epidemic control and fiscal revenue reduction. First, the epidemic control led to the restriction of relevant activities and the suspension of financial expenditure. For example, the growth rate of expenditure on education and infrastructure fell to - 10.5% and 2.4% respectively from 7.6% and 8.5% last month, which was similar to that in March 2020; Second, the epidemic has a revenue reduction effect on fiscal revenue. If estimated according to the growth rate of fiscal revenue last month, the epidemic led to a decrease of more than 200 billion yuan in the budget revenue of general public budget and government funds in April.
Second: the retention tax rebate is the main reason for the rapid decline of fiscal revenue, and the epidemic is a secondary factor.
In April, the year-on-year growth rate of general public budget revenue decreased to - 41.3%, compared with 3.4% last month, and the absolute number decreased by 863.7 billion yuan compared with the same period last year. The epidemic situation superimposes tax rebates, which drag down fiscal revenue, of which tax rebates are the leading factor. In April, China's value-added tax rebate was about 800 billion yuan, equivalent to 37.5% of the fiscal revenue in April last year, accounting for about half of the annual 1.5 trillion new tax rebate target announced by the Ministry of finance. The implementation progress is fast.
The epidemic has indeed caused a drag on fiscal revenue, but the overall actual impact is lower than expected. Compared with the epidemic period from March to may in 2020, the average monthly fiscal revenue decreased by 280 billion yuan compared with the same period of the previous year. In April this year, after deducting the impact of tax rebate, the general public budget revenue was 1.99 trillion, a decrease of 102.2 billion yuan over the same period last year. After deducting the impact of tax rebate, the growth rate of value-added tax was generally consistent with that of the previous month, with an absolute decrease of 22.2 billion yuan and 18.2 billion yuan in March compared with the previous year.
Third: the real estate market has a greater impact on fiscal revenue than production and consumption.
Excluding the impact of tax rebate, the drag items of fiscal revenue in April focused on land transfer fees, land and real estate related taxes, enterprise income tax, etc., while individual income tax and consumption tax performed stably. Among them, the income of land transfer fee in April was - 37.9% year-on-year, lower than - 22.8% in the previous month; The deed tax was - 43.4% year-on-year, down from - 17.3% last month; The land value-added tax was - 31.7% year-on-year, down from 25.7% last month; Corporate income tax was - 1.3% year-on-year, down from 45.7% last month; Personal income tax was - 9.5% year-on-year, up from - 51.3% last month; China's consumption tax was 14.3% year-on-year, up from 8.6% last month.
Therefore, in addition to resuming work and production, reversing the current situation of real estate downturn is very important for stabilizing fiscal revenue and ensuring government fund revenue.
Risk tip: China's epidemic continues to repeat, and the income from land transfer has fallen more than expected.
