**<mark>Table 1: Size of Government Revenue, China 2018</mark>**

|**Categories**<br>|**Amount (Unit:**<br>**bln RMB)**|**% of Total**<br>**Revenue**|**% of GDP**|**Included in**<br>**analysis**|
|---|---|---|---|---|
|**Total Revenue**|26,197|**100.0%**|29.1%||
|**_Total Tax Revenue_**<br>_in which_|15,640|**59.7%**|17.4%||
|Direct taxes|||||
|Personal Income Tax|1,387|5.3%|1.5%|Yes|
|Corporate Income Tax<br>Indirect taxes|3,532|13.5%|3.9%|No|
|VAT (Domestic &Imported)|7777|29.7%|8.6%|Yes|
|Consumption Tax (Domestic &Imported)|1128|4.3%|1.3%|Yes|
|Other taxes|1816|6.9%|2.0%|No|
|**_Total Contribution to Social Insurance_**<br>_in which:_|7,861|**30.0%**|8.7%||
|Contribution to Employee's System|7,523|28.7%|8.4%|Yes|
|Contribution to Resident's System|337|1.3%|0.4%|Yes|
|**_Total Non-Tax Revenue_**<br>**_Notes:_**The government budget in China has four categories|2,696<br>:|**10.3%**|3.0%|No|

**_Notes:_** The government budget in China has four categories:

(i) The General Public Budget (GPB) which includes tax and non-tax revenue. This category is included in this table and represented 52.6% of total government revenue* in 2020.

(ii) The social security fund budget (SSFB) which includes contributions of firms and individuals to social security funds and pays for social security benefits. This category is included in this table and represented 18.7% of total government revenue in 2020 (after deducting the subsidies transferred from the other budgets).

(iii) The Government Fund Budget (GFB) which includes revenue from the 24 government funds of which land lease fund revenue is the largest, local government special bonds and others. This category is _<u>not</u>_ included in the table; it represented 23.3% of total government revenue in 2020.

(iv) The state-owned enterprise (SOE) operation fund budget which included revenue accrued through the SOEs. This category is _<u>not</u>_ included in the table; it represented 1.1% of total government revenue in 2020.

* Data for total revenues reflect a small amount of double-counting data because of the transfer of funds among the budget categories and the lack of exact double-counting data. (Qiao, Fan, Rahemtulla, van Rijn & Li, 2022)

**_Sources_ :** Statistical Yearbook of China 2019, National Bureau of Statistics (2019), Finance Yearbook of China (2019), Ministry of Finance (2019), 2018 Annual Report of Housing Fund, Ministry of Housing and Urban-Rural Development, Ministry of Finance & The People's Bank of China, 2019.

Figure 1 shows that China lies around the middle of the distribution of upper-middle-income countries in terms of revenue collection. It also uses a mix that relies more on social security contributions rather than on personal income taxes or indirect taxes other than VAT. China’s social security contributions amount to 8.7 percent of its GDP, second only to Belarus (11.7- percent) among upper-middle income countries and is very close to the average of the high-income countries in the figure (8.8 percent). On the other hand, it collects just 1.5 percent of its GDP through personal income taxes, one of the lowest shares among upper-middle-income countries, far below highincome countries, and just slightly higher than average share of the low-income countries included in the figure (1.2 percent). China’s collection of VAT (8.6 percent of GDP) and all other indirect taxes (0.2 percent of GDP) places it around the median of the high-income country average of 8.3 percent of GDP. China’s own revenue mix also shows a notable shift between 2014 and 2018, with distinct increase in the share of revenues from social security contributions, VAT and a distinct reduction in the shares of other direct taxes, including personal and payroll taxes.

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