2026 H1 Tax Revenue Up 4.9%, Tax Cuts Release 1.91 Trillion Yuan, Emerging Sectors Strong

In the first half of 2026, nationwide tax and fee revenue showed a generally stable growth trend. Tax revenue (excluding customs-levied import taxes and export rebates) exceeded 10 trillion yuan, up 4.9% year-on-year.

The tax growth was mainly driven by the generally stable economic operation, the continued recovery of the Producer Price Index (PPI), and the strong momentum of emerging industries and key sectors. In the first half, PPI rose 1.5% year-on-year, with a 3.6% increase in the second quarter, marking the first quarterly positive growth since the fourth quarter of 2022; the June year-on-year increase expanded to 4.1%. China's tax structure is dominated by turnover taxes, and the PPI rise directly boosted turnover tax revenue.

In the first half, the activity of business entities further improved. The number of active business entities nationwide that have handled tax-related matters and are operating normally increased by 20.2% year-on-year. The high-end industrial structure continued to advance. Sales revenue of high-tech industries and digital economy core industries increased by 15% and 8.7% year-on-year, respectively, and their shares of total enterprise sales revenue rose by 1.7 and 1.1 percentage points year-on-year. The number of foreign-invested tax-related business entities increased by 10.9% year-on-year, and the total declared profit of foreign-invested enterprises increased by 4.5% year-on-year. The tax authorities processed export rebates up 7.7% year-on-year.

Tax and fee reductions and refunds supporting technological innovation and manufacturing development released a total of 1.91 trillion yuan in benefits. Among them, policies supporting enterprise innovation investment and technology transfer, such as additional deduction of R&D expenses, reduced taxes and fees by 659.6 billion yuan; policies supporting the cultivation and development of high-tech enterprises and emerging industries, such as a reduced 15% corporate income tax rate for high-tech enterprises, reduced taxes by about 252 billion yuan; and policies supporting high-end development, such as the additional VAT deduction for advanced manufacturing enterprises, reduced taxes and fees by nearly 1 trillion yuan. Policy benefits are accelerating the transformation into industrial momentum, with profits of high-tech manufacturing enterprises increasing by 29.2% year-on-year.

While implementing tax and fee reductions, tax collection and management continued to be standardized and optimized. In the first half, the nationwide investigation and handling of various tax-related illegal activities recovered 180.6 billion yuan in tax losses, up 20.8% year-on-year.

Some traditional industries accelerated transformation and upgrading: sales revenue of food manufacturing, clothing, and paper industries increased by 11.6%, 9.2%, and 8.9% year-on-year, respectively. Emerging industries maintained rapid growth: sales revenue of smart in-vehicle equipment, drones, and robots increased by 43%, 36.2%, and 27.3% year-on-year, respectively. The amount of R&D equipment and R&D services purchased by enterprises nationwide, as well as sales revenue of scientific research and technical services and intellectual property-intensive industries, all maintained double-digit growth. Sales revenue of digital economy core industries increased by 8.7% year-on-year, among which sales revenue of digital product manufacturing and digital application technology industries increased by 14.2% and 11.7% year-on-year, respectively. Enterprise procurement of digital technology nationwide increased by 8.3% year-on-year, with manufacturing procurement of digital technology increasing by 15.5% year-on-year.