(Yicai) Nov. 18 -- China's tax revenue continued to expand in October for the fourth consecutive month, according to the latest official data.

Tax revenue rose 8.6 percent last month from a year earlier, data from the Ministry of Finance showed yesterday. The figure climbed 8.7 percent in September and over 5 percent in July and August, after declining in four of the first six months of the year.

The finance ministry did not explain October's strong tax revenue performance, but earlier said that the reasons for September's growth were the economic recovery, narrowing producer price index decline, and a lower comparative base in the same period last year.

In the 10 months ended Oct. 31, China's general public budget revenue, which combines tax and non-tax revenues, rose 0.8 percent to CNY18.65 trillion (USD2.62 trillion) from the same period last year. Tax revenue jumped 1.7 percent to CNY15.34 trillion, and non-tax revenue fell 3.1 percent to CNY3.31 trillion (USD465.3 billion).

The bullish capital market has been a significant contributor to China's tax revenue growth in the past months. The Shanghai Composite Index hit a 10-year high in September, with daily average stock trading volumes reaching CNY2.3 trillion in August and CNY2.4 trillion in September.

This boosted tax collection from capital market-related sectors, including securities trading stamp duties, which soared 88 percent to CNY162.9 billion (USD22.9 billion) in the first 10 months of the year from a year earlier. Personal income tax revenue jumped 12 percent to CNY1.34 trillion in the period.

The PPI also started showing signs of improvement, with October becoming this year's first month-on-month increase of 0.1 percent. On a yearly basis, the decline narrowed to 2.1 percent, marking the third consecutive month of improvement.

However, tax revenue growth is expected to slow in the fourth quarter due to a high base a year earlier, said Huang Lixin, director of the Tax Science Research Institute at the State Taxation Administration.

Government fund revenue, which mainly consists of revenues from land sales and makes up the overall fiscal revenue along with the general public budget revenue, declined at a steeper pace in the first 10 months, primarily because of the continuously sluggish real estate market.

China's government fund revenue fell 2.8 percent to CNY345 billion in the first 10 months of the year from a year earlier, as land sale income plunged 7.4 percent to CNY249 billion.

While China has maintained an expansionary fiscal policy this year, government spending growth showed signs of moderation in October. In fact, general public budget expenditure rose 2 percent to CNY22.58 trillion in the first 10 months from the same period last year, down from 3.1 percent in the first nine months.

Editor: Futura Costaglione