Group 1 - The personal income tax system in China is effectively playing a role in income distribution adjustment, with the top 10% of earners contributing around 90% of total personal income tax revenue from 2021 to 2024 [1] - Individuals with annual comprehensive income below 120,000 yuan are generally exempt from tax after annual reconciliation, indicating a clear distribution effect where high-income earners pay more tax while middle and low-income earners pay less or no tax [1] - The cumulative tax reductions during the "14th Five-Year Plan" period are expected to reach 10.5 trillion yuan, with significant effects from the implementation of special additional deductions for personal income tax [1] Group 2 - By 2024, the number of individuals benefiting from special additional deductions is projected to reach 119 million, a 55% increase from the initial reconciliation in 2020 [1] - The amount of tax reductions has increased significantly from 116 billion yuan in 2020 to nearly 300 billion yuan this year, representing a growth of 156.5% [1] - Over 1 billion taxpayers applied for tax refunds during the 2024 personal income tax reconciliation period, with refund amounts exceeding 130 billion yuan, while over 7 million taxpayers declared additional tax payments of over 48 billion yuan [1] Group 3 - As of June 2023, the number of tax-related business entities in China has surpassed 100 million, reflecting strong market vitality and resilience [2] - During the "14th Five-Year Plan" period, tax revenue is expected to exceed 155 trillion yuan, accounting for about 80% of total fiscal revenue [2] - The tax authorities have effectively addressed illegal tax behaviors, recovering 571 billion yuan in various tax losses and exposing over 1,500 typical tax-related cases since the beginning of the "14th Five-Year Plan" [2]

Core Viewpoint - The growth of individual income tax (IIT) revenue has been a significant factor in narrowing the decline of national tax revenue in 2025, with a notable increase in personal income contributing to this trend [1][3]. Group 1: Individual Income Tax Revenue - In the first five months of 2025, individual income tax revenue reached 657.2 billion yuan, reflecting an 8.2% year-on-year increase, which is higher than the national tax revenue growth rate of -1.6% during the same period [1][4]. - The individual income tax revenue for May 2025 was 119.6 billion yuan, showing a 12.3% year-on-year growth [1]. - The growth in individual income tax is attributed to the steady increase in residents' income, with the average disposable income per capita in the first quarter of 2025 being 12,179 yuan, a nominal increase of 5.5% [2]. Group 2: Factors Influencing Growth - The increase in individual income tax revenue is linked to rising incomes, particularly in regions like Beijing, where tax revenue grew by 6.4% in the first four months of 2025 due to factors such as stock option exercises and year-end bonuses [3]. - High-income earners, particularly those with annual incomes exceeding 1 million yuan, contribute significantly to the overall individual income tax, accounting for over 50% of total tax revenue despite representing only 1% of taxpayers [3]. - The low base from the previous year also contributed to the growth in individual income tax revenue [3]. Group 3: Future Projections and Trends - The Ministry of Finance projects that individual income tax revenue for 2025 will reach approximately 1.57 trillion yuan, with an expected year-on-year growth of about 6.3% [7]. - The ongoing strengthening of tax administration is expected to have a positive impact on revenue collection, as evidenced by recent actions against tax evasion [5]. - The performance of the stock market and the activity in the second-hand housing market are also seen as contributing factors to the growth in individual income tax revenue [5].