China’s fiscal revenue in May was 1.61 trillion yuan, a 3.7 percent increase on last year. However, growth is down from April, according to data from the Finance Ministry.

In May, the central government collected 795.1 billion yuan in fiscal revenue, down 3.6 percent from a year ago. Figures also show that the number is down three percent compared to April, where 821.3 billion yuan was taken. 

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The ministry said the growth rate was relatively low, attributing the slowdown to softened economic indicators, continued tax breaks and a high base from a year ago.

The income from value-added tax (VAT), which accounted for nearly 30 percent of tax revenue last month, dropped 13.8 percent from a year ago to 404.2 billion yuan.

As a major move in tax reductions, China expanded VAT to the whole economy in May 2016 to lower corporate burdens, with all other business taxes abolished.

China's Ministry of Finance, March 27, 2017. /CFP Photo

The ministry estimated that falling VAT income dragged down the total tax revenue growth by 8.4 percentage points in May.

The country pledged a more proactive and effective fiscal policy in 2017 to support economic growth, with the government's fiscal deficit set at 3 percent of GDP, or 2.38 trillion yuan for the year, a year-on-year increase of 200 billion yuan.

(Xinhua contributed to this report)