Tax data for H1 2026 confirms economic rebound, clean energy and high-tech show strong growth

Tax big data showed that China's economic performance trended positively in the first half of 2026. From January to June, the number of active business entities that had completed tax-related matters and were operating normally rose 20.2% year-on-year, and the number of tax-filing households rose 10%. Tax authorities collected a total of 16.7 trillion yuan in taxes and fees in the first half, of which tax revenue exceeded 10 trillion yuan, up 4.9% year-on-year. Over the same period, industrial enterprises' sales revenue increased 7.1%, and manufacturing sales revenue grew 7.3%; industrial sales revenue accounted for 36% of all business sales revenue, up 2.2 percentage points from the first half of 2025, and total industrial equipment investment jumped 9.8%.

The trend toward a higher-end industrial structure was clear. Sales revenue of high-tech industries and the core digital economy sectors grew 15% and 8.7%, respectively, and their share of total business sales revenue rose 1.7 and 1.1 percentage points. Sales revenue of three sectors closely tied to new quality productive forces—equipment manufacturing, information transmission/software/IT services, and science and technology services—accounted for 23.5% of total business sales revenue, 2.2 percentage points higher than the first half of 2025. Revenue from ecological protection and environmental governance increased 6.9%, and sales revenue from clean energy power generation, including wind, solar, hydro, and nuclear, surged 17.1%, constituting 38.8% of electricity generation sales revenue, up 3.8 percentage points from the year-ago period.

Personal income tax revenue rose about 13% in the first half, making it the country's third-largest tax category. The top 1% of income earners contributed over half of all personal income tax, and the top 10% accounted for roughly 90%. By June 30, the seventh annual comprehensive income tax settlement had been completed smoothly; more than 200 million taxpayers filed their settlement returns, an increase of 4.38% year-on-year, and over 100 million taxpayers applied for refunds totaling more than 150 billion yuan. Those with annual income below 120,000 yuan generally paid no tax or only a small amount after basic deductions and special deductions, and over 70% of filers owed no additional tax. Among those with a tax liability, more than 60% fell under the 3% bracket.

Tax cuts and incentives for public welfare in areas such as elderly care, healthcare, education, and employment grew 11.8% year-on-year in the first half. Some 126 million individuals benefited from special additional deductions for personal income tax, reducing tax payments by more than 320 billion yuan. Tax authorities, together with human resources and social security departments, advanced a pilot program of occupational injury protection for new forms of employment; from July 1, 2026, the pilot was expanded nationwide, cumulatively covering 29.1 million people. In the first half, tax and fee cuts, rebates, and refunds supporting scientific and technological innovation and manufacturing reached 1.91 trillion yuan. This included 659.6 billion yuan from policies such as the super-deduction for R&D expenses, roughly 252 billion yuan from the reduced 15% corporate income tax rate for high-tech enterprises, and nearly 1 trillion yuan from value-added tax credit policies for advanced manufacturers.

Tax departments continued to address 'involution-style' competition and rectify the 'invoice economy.' In the first half of 2026, local tax authorities pushed for the repeal or amendment of 833 illegal investment-attracting tax-related documents or agreements, strictly preventing illicit tax rebates from undermining fair and unified market competition. They issued positive and negative lists for compliant invoicing—16 items on the positive list and 28 on the negative list—and intensified corrections to competition problems caused by the 'invoice economy.' Among enterprises identified as engaging in such practices, invoice amounts fell 37.7% year-on-year, and the national 'tax content' per 100 yuan of invoices rose 13.7% compared with 2025.

In the first half, various tax-related violations were investigated nationwide, recovering lost tax revenue of 180.6 billion yuan, a 20.8% increase year-on-year. More than 3,200 enterprises were found to have fraudulently obtained or improperly enjoyed tax incentives, with 12 billion yuan in back taxes recovered; 32,400 enterprises suspected of issuing fraudulent invoices or evading taxes were investigated, recouping 4.6 billion yuan in export tax rebates; and over 500 non-compliant tax agencies were addressed. The VAT law and its implementing regulations took effect on January 1, 2026. In the first half, VAT revenue collected by tax authorities amounted to 3.87 trillion yuan, up 6%, and the number of newly registered general VAT taxpayers reached 1.09 million, a 25.2% increase.

Tax authorities continued to improve services. Smart tax services now cover 85% of all tax matters, and average processing times have been reduced by 20%. In livelihood sectors such as parking, retail, catering, and accommodation, a 'pay-and-invoice' system was piloted. The 'buy-and-refund' departure tax refund service was further optimized; in the first half, the number of overseas travelers processing departure tax refunds jumped 366% year-on-year, while refunded sales and tax amounts both rose 69%. The regulation on tax information reporting by internet platform companies has been in effect for one year. In the first quarter of 2026, the number of merchants on platforms that declared and paid taxes increased 37% compared with before the rule took effect, and the value of invoices obtained by small-scale platform taxpayers from upstream enterprises grew 48% year-on-year, up 20 percentage points quarter-on-quarter and more than doubling from the initial reporting in 2025.