China’s government revenue fell 9.9% year-on-year in the first two months of 2020 to stand at 3.5 trillion yuan ($ 494.965 billion), the largest decline since February 2009, according to data released by the Ministry of Finance of the Asian country.
Tax revenue decreased 11.2% year-on-year during the first two months of the year to 3.1 trillion yuan ($ 438.398 billion), while non-tax revenue grew 1.7% to 405.7 billion yuan ( 57,373 million dollars), according to the same source.
Likewise, government spending fell 2.9% in the first two months of the year despite disbursements for public health increasing 22.7%.
The economic publication Caixin adds that the prevention and control measures to prevent the spread of COVID-19 during those two months stopped commercial activity in its tracks, causing less collection of value added taxes, on goods and services, on companies or on property.
According to the digital edition of the magazine, in February, when China suffered the worst ravages of the coronavirus outbreak, the country’s tax revenue fell 21.4% year-on-year, the biggest monthly drop since 1996, when this data began to be recorded.
The hospitality and tourism industry was the most affected, according to Caixin, since its contributions to the treasury were cut in half in the first two months of the year compared to the previous year.
Not surprisingly, hotels and restaurants were forced to close during the months of January and February to contain the spread of the virus before gradually resuming activity.
In the aforementioned period, the only taxes that increased their collection were income taxes, which grew by 14.8% year-on-year, and stamp taxes on stock market transactions, whose total contribution to the treasury rose by 30.8%.
Several economic indicators have begun to reflect the fall in activity in the second world economic power, where the pandemic came to paralyze the country and has left at least 3,281 deaths from COVID-19 among the 81,218 infected with coronavirus diagnosed since the start of the outbreak. .
Industrial production fell 13.5% year-on-year in January and February, an unprecedented figure since 1990, which added to the drop in foreign trade and manufacturing.
In response, the Chinese authorities began applying some relief measures – aimed especially at SMEs – such as lowering the cost of energy, reducing or exempting social security contributions, lowering taxes or an extra fund of 500 billion yuan for low interest loans to affected companies.