Consumption Tax Cut by 16%! Retail Up by 9%?

Before this weekend arrives, we've seen the Ministry of Finance release a set of the latest macroeconomic data, among which the data on consumption tax is particularly eye-catching.

In the first five months of this year, the domestic consumption tax was 709.8 billion yuan, which is a significant decrease of 16.1% compared to the first five months of last year.

Looking at this data, the consumption situation in the first five months of this year is not ideal.

However, in another set of data from the National Bureau of Statistics a few days ago, we saw that the total retail sales of consumer goods in society in the first five months of this year is actually increasing.

Advertisement

The two sets of data seem to be at odds with each other, one increasing and one decreasing, which one do you believe?

In fact, the simpler question should be whether the consumption around you has increased or decreased compared to last year?

In the tax revenue situation announced by the Ministry of Finance, it's not just the consumption tax that is decreasing, including corporate and personal income tax, as well as some other types of taxes, but the 16.1% significant drop in consumption tax should be more concerning.

Since the beginning of this year, the country has not announced a significant reduction in consumption tax, so the significant decrease in revenue from this tax can only indicate that the base has decreased, which means consumption is not recovering and rebounding as much as we thought.

Regarding stimulating consumption, some experts believe that the real estate market should be stimulated to revive it; others believe that the stock market should be boosted.

However, real estate has almost reached its peak, and it is unrealistic to further increase the real estate market.

However, the funds of the common people are not in the stock market but are all deposited in banks.

Looking at the recent bank deposit data, the growth of the balance of new deposits by residents is very fast, and the balance of residents' deposits has reached hundreds of trillion yuan.

The main reason is that the common people dare not spend money.

The latest data from the central bank also shows that after a rare decrease in household deposits in April, the household deposits in May have resumed growth.

This indicates that the common people ultimately choose to deposit money in banks.

There is a saying that there are three engines driving the economy.

In terms of consumption, after the end of the epidemic, everyone's consumption should be recovering.

However, looking at the consumption data, domestic consumption has not increased significantly, and the common people still dare not spend money.

In terms of investment, the country has always focused on infrastructure investment.

Currently, real estate has declined, and the development of the real estate market is very sluggish, which has also led to a lot of people waiting and seeing.

In terms of trade, in May, both in US dollar terms and in RMB terms, China's export volume has declined.

In March and April, China's export volume increased in RMB terms.

However, in May, it was in negative growth.

The most direct reason is that the global economic development is relatively sluggish, and the domestic consumption capacity of various countries has declined, especially in developed countries such as Europe and the United States.

So it's not just China's export volume that is declining; the export volumes of countries such as South Korea, Vietnam, and India have also declined.

Now the three engines driving the economy are not working.

So how should our country develop the economy in the second half of the year?

However, another set of data gives us a little peace of mind.

The data released by the National Bureau of Statistics shows that the total retail sales of consumer goods in society in the first five months of this year has increased by 9.3% year-on-year.

Among them, the retail sales volume in May increased by 12.7% year-on-year, and also increased by 8.3% month-on-month.

Looking at this statistical approach, consumption has increased.

However, this data obviously conflicts with the data on consumption tax, which may be related to the slightly different coverage of statistics by different departments.

But we can still see that over the years, our retail sales volume has been increasing.

However, in the years after the epidemic began, no matter how the year-on-year data and the month-on-month data change, the overall situation has not been able to break through upward.

The years from 2020 to 2022 are understandable, as the epidemic affected these three years, but in 2023, after the epidemic control has been relaxed, the retail sales volume is still within the previous range, and even seems to have slightly declined.

I have asked many friends from different regions, and most people's answers are that their own consumption and the consumption of people around them this year have not significantly increased compared to last year, and even slightly declined.

What should we do?

Ensuring income and increasing income is the most important and effective way.

At present, we need to maintain and expand employment through various means, and enterprises are an important way to solve employment problems.

To stabilize employment, we must first stabilize enterprises, not only facilitate enterprises to obtain financing, but also continue to reduce the tax burden on enterprises.

At the same time, we should also encourage people to start businesses and innovate, and provide more support in terms of taxation, finance, talent, and places, so that they can better play a positive role in promoting employment through entrepreneurship.

The "stall economy" can help solve this problem and can be further promoted.

Relevant data show that the proportion of self-employed employment in the labor population is 29%, and the market share is 67%.

Its investment threshold is low, with smaller risks, and can quickly realize capital turnover.

If the business is good, it can basically solve the basic living problems.

Even if the epidemic has passed, we may soon usher in the spring of the economy.