(Yicai Global) May 19 -- China’s revenue from personal income taxes fell 2.4 percent in the first four months of this year from a year earlier because of the economy, tax deductions, and other factors.

Tax revenue from personal incomes dropped to CNY104.5 billion (USD15.6 billion) between Jan. 1 and April 30, data from the finance ministry showed yesterday. Excluding 2012 and 2019, that was the lowest since 2010, when it declined in the wake of a tax system overhaul.

The tax take fell because some industries with very high salaries cut or postponed payments, public institutions in some areas cut allowances, and tax refunds rose, Luo Zhiheng, chief economist and head of the research institute of Yuekai Securities, told Yicai Global.

Another factor was new special additional deductions for infant care costs and elderly insurance, according to Wang Wei, a tax lecturer in Fudan University’s school of economics.

We should look at the decline rationally, as it is likely that lower incomes or chance factors that led to a higher base figure, Luo pointed out. If it is the latter, personal tax contributions will rise with income growth when chance factors are eliminated, Luo noted.

In addition to wages, personal income tax also accrues from property transfers, interest payments, dividends and bonuses. The threshold in China is CNY60,000 (USD18,522) a year, with special additional deductions overlaid, resulting in more than 100 million people liable for income tax.

Employment, especially youth employment, was sluggish in the first quarter, and the real estate sector was still recovering, Luo said.

Personal disposable income per capita was CNY10,870 last quarter, a nominal increase of 5.1 percent from a year earlier, according to the National Bureau of Statistics. A better jobs market down the line will underpin a steady increase in the government’s income tax haul. It predicts a 9.6 percent jump this year.

Editor: Martin Kadiev