Significant Growth in China's Personal Income Tax Revenue, Analysis Points to Big Data Tax Collection as Key Factor
China's personal income tax revenue saw a significant 10.5% increase in the first quarter of 2026. Experts analyze that the main reason is the strengthening of tax collection and management, dubbed 'tax governance by data,' which utilizes big data. A notable increase in tax payments from high-income individuals and back taxes on overseas income are key contributing factors.
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- 📰 Published: May 16, 2026 at 20:41
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(Central News Agency, Taipei, 16th) Continuing the significant growth of 2025, China's personal income tax revenue surged by 10.5% in the first quarter, far outpacing other tax categories. Mainland media reports, citing tax officials and experts, indicate that the main reason is the strengthened collection and management using big data, with a noticeable increase in tax payments from high-income residents and back taxes on overseas income.
As China's economic growth has slowed in recent years, tax revenues have decreased annually. In 2021, the Chinese government issued the "Opinions on Further Deepening the Reform of Tax Collection and Management," proposing the construction of smart taxation and promoting the transformation of tax collection towards "tax governance by data," using technologies like big data, blockchain, and artificial intelligence to comprehensively strengthen audits. Officials claim that the smart taxation system was basically completed by 2025.
Economic Observer reported today that China's personal income tax revenue grew by 11.5% in 2025. This trend continued into the first quarter of this year, with personal income tax growing by 10.5%, far exceeding the growth rates of other tax types and also significantly higher than the 4% growth rate of urban and rural residents' income.
The report mentioned that in a certain southern region, personal income tax revenue growth exceeded 10% last year and this year. The head of the local tax department revealed that the high growth in personal income tax was mainly due to a significant improvement in the tax compliance of high-net-worth individuals. In the past, a lot of income was outside tax supervision, but now, through big data, it has all been brought into the scope of collection and management.
The official said that with the application of tax big data and cross-border tax-related information exchange, the tax compliance of high-net-worth individuals has greatly improved. In addition, income distributed to corporate executives in non-wage forms is being gradually brought under unified collection and management, which has also driven the increase in personal income tax. At the same time, rising stock prices of listed companies and gains from share reductions by shareholders have also contributed.
The head of a tax department in an eastern county stated that the growth rate of personal income tax in the first quarter far exceeded the overall growth rate of tax revenue because the performance of listed companies in the jurisdiction was very good in 2025. This led to two results: first, good performance meant high dividends, and corresponding tax payments naturally increased; second, rising stock prices led to large taxable incomes from high-level share reductions by shareholders. These two factors together drove the high growth of personal income tax.
Transaction volumes in mainland China's stock market have increased significantly this year. According to the Ministry of Finance, the securities transaction stamp duty in the first quarter of this year increased by 78.1% compared to the same period last year.
The report quoted Ye Yongqing, a lawyer at Anli Law Firm, who pointed out that the strengthening of personal income tax collection, especially the strict collection from high-net-worth individuals and the first widespread collection of overseas income, are important factors. 2025 was the first year of proactive management for overseas income reporting. Measures such as managing overseas income reporting, big data verification, and income verification for platform economy practitioners have directly led to back taxes and the manifestation of the tax base, which in turn has led to an increase in the growth rate of personal income tax.
Mainland China's 2025 annual personal income tax comprehensive income final settlement started on March 1st and will end on June 30th. It targets residents with an annual comprehensive income exceeding RMB 120,000 (approximately NT$557,000) and who need to pay more than RMB 400 in back taxes. (Editor: Yang Sheng-ju / Tang Sheng-yang) 1150516
As China's economic growth has slowed in recent years, tax revenues have decreased annually. In 2021, the Chinese government issued the "Opinions on Further Deepening the Reform of Tax Collection and Management," proposing the construction of smart taxation and promoting the transformation of tax collection towards "tax governance by data," using technologies like big data, blockchain, and artificial intelligence to comprehensively strengthen audits. Officials claim that the smart taxation system was basically completed by 2025.
Economic Observer reported today that China's personal income tax revenue grew by 11.5% in 2025. This trend continued into the first quarter of this year, with personal income tax growing by 10.5%, far exceeding the growth rates of other tax types and also significantly higher than the 4% growth rate of urban and rural residents' income.
The report mentioned that in a certain southern region, personal income tax revenue growth exceeded 10% last year and this year. The head of the local tax department revealed that the high growth in personal income tax was mainly due to a significant improvement in the tax compliance of high-net-worth individuals. In the past, a lot of income was outside tax supervision, but now, through big data, it has all been brought into the scope of collection and management.
The official said that with the application of tax big data and cross-border tax-related information exchange, the tax compliance of high-net-worth individuals has greatly improved. In addition, income distributed to corporate executives in non-wage forms is being gradually brought under unified collection and management, which has also driven the increase in personal income tax. At the same time, rising stock prices of listed companies and gains from share reductions by shareholders have also contributed.
The head of a tax department in an eastern county stated that the growth rate of personal income tax in the first quarter far exceeded the overall growth rate of tax revenue because the performance of listed companies in the jurisdiction was very good in 2025. This led to two results: first, good performance meant high dividends, and corresponding tax payments naturally increased; second, rising stock prices led to large taxable incomes from high-level share reductions by shareholders. These two factors together drove the high growth of personal income tax.
Transaction volumes in mainland China's stock market have increased significantly this year. According to the Ministry of Finance, the securities transaction stamp duty in the first quarter of this year increased by 78.1% compared to the same period last year.
The report quoted Ye Yongqing, a lawyer at Anli Law Firm, who pointed out that the strengthening of personal income tax collection, especially the strict collection from high-net-worth individuals and the first widespread collection of overseas income, are important factors. 2025 was the first year of proactive management for overseas income reporting. Measures such as managing overseas income reporting, big data verification, and income verification for platform economy practitioners have directly led to back taxes and the manifestation of the tax base, which in turn has led to an increase in the growth rate of personal income tax.
Mainland China's 2025 annual personal income tax comprehensive income final settlement started on March 1st and will end on June 30th. It targets residents with an annual comprehensive income exceeding RMB 120,000 (approximately NT$557,000) and who need to pay more than RMB 400 in back taxes. (Editor: Yang Sheng-ju / Tang Sheng-yang) 1150516