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China Raises Taxes Amid Economic Slowdown and Deflation

2/2/2026

Summary

Story summary

China has tightened tax incentives and raised rates to boost government funds amid an economic slowdown and deflation.
The Ministry of Finance announced provisions to the value-added tax law, raising telecommunication services from 6% to 9%, affecting China Mobile, China Unicom, and China Telecom.
The adjustment followed a 1.7% decline in on-budget fiscal revenue in 2025, the first contraction since 2020, and a miss of the government's growth target.

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Story summary

China has tightened tax incentives and raised rates to boost government funds amid an economic slowdown and deflation.
The Ministry of Finance announced provisions to the value-added tax law, raising telecommunication services from 6% to 9%, affecting China Mobile, China Unicom, and China Telecom.
The adjustment followed a 1.7% decline in on-budget fiscal revenue in 2025, the first contraction since 2020, and a miss of the government's growth target.