Up to 35%: State-owned enterprise profits to be increased in contributions to the finance! 2026 Central government budget disclosure

Recently, the Ministry of Finance announced the central government budget for 2026 and provided explanations regarding the central general public budget revenue, central government fund budget, and central state-owned capital operation budget for 2026.

The Ministry of Finance’s “Explanation on the Central State-Owned Capital Operation Budget for 2026” disclosed that the profit collection ratio from state-owned wholly-owned enterprises (non-financial) for 2026 is mainly divided into four categories, with the highest collection ratio set at 35%, significantly higher than the 25% maximum collection ratio in 2025. Except for policy-oriented enterprises that are exempt from paying state-owned capital income, the collection ratios for various enterprises have generally increased.

In addition, according to the Ministry of Finance’s “Explanation on the Central General Public Budget Revenue for 2026,” the budget for securities transaction stamp duty in 2026 is projected to increase by 0.7% compared to the 2025 execution amount; the budget for vehicle purchase tax is expected to grow by 22.2% compared to the 2025 execution amount; and the budget for confiscated income is anticipated to decline by 16.8% compared to the 2025 execution amount.

Increase in the proportion of profits paid by state-owned enterprises to the treasury

According to the Ministry of Finance’s “Explanation on the Central State-Owned Capital Operation Budget for 2026,” the budget for central state-owned capital operation revenue in 2026 is set at 371.632 billion yuan, with profit revenue at 352.233 billion yuan. Among these, the profit collection ratios from state-owned wholly-owned enterprises (non-financial) are mainly divided into four categories:

The first category includes tobacco enterprises and resource-oriented enterprises such as oil, electricity, telecommunications, and coal, with a collection ratio of 35%. The revenue paid in 2026 is 270.06 billion yuan, down by 5.4%.

The second category includes general competitive enterprises such as non-ferrous and ferrous metallurgy, extraction, transportation, electronics, trade, and construction, with a collection ratio of 30%. The revenue paid in 2026 is 63.317 billion yuan, down by 7.8%.

The third category includes military enterprises, research institutions undergoing transformation, China Post Group Co., Ltd., China National Railway Group Co., Ltd., Beidahuang Agricultural Reclamation Group Co., Ltd., central cultural enterprises, and enterprises affiliated with central departments, with a collection ratio of 20%. The revenue paid in 2026 is 17.856 billion yuan, down by 9.8%.

The fourth category consists of policy-oriented enterprises, which are exempt from paying state-owned capital income. State-owned sole proprietorships meeting the standards of small and micro enterprises are exempt from paying if their profit falls below 100,000 yuan. In addition, financial enterprises’ profit revenue is 1 billion yuan.

In the past year, the revenue from the central state-owned capital operation budget reached 390.274 billion yuan, an increase of 73.3%, mainly due to the Ministry of Finance raising the collection ratio of state-owned capital income from central enterprises, leading to increased revenue. In the new year, the Ministry of Finance has clearly stated in the 2026 budget draft report that it will “increase the collection ratio of state-owned capital income.”

This year, the classification of profit collection ratios for central enterprises has been adjusted from five categories to four, with the collection ratios for various enterprises generally increased, except for policy-oriented enterprises that are exempt from paying state-owned capital income. For instance, resource-oriented enterprises such as oil, electricity, telecommunications, and coal, which were previously classified as the second category with a 20% collection ratio, are categorized with tobacco enterprises as the first category in 2026, with a 35% collection ratio.

Securities transaction stamp duty budget continues to grow

In 2026, the budget for central general public budget revenue is projected to increase by 1.8% compared to the previous year’s execution amount. From the major tax categories, the Ministry of Finance’s “Explanation on the Central General Public Budget Revenue for 2026” shows that the budget for domestic value-added tax, domestic consumption tax, corporate income tax, and individual income tax in 2026 is expected to increase by 3.7%, 0.9%, 1.1%, and 2.4%, respectively, compared to the 2025 execution amounts.

Following a significant increase last year, the budget for securities transaction stamp duty in 2026 is projected to grow by 0.7% compared to the 2025 execution amount, with the Ministry of Finance indicating that this budget is “mainly based on the anticipated trading volume in the stock market.”

Regarding the vehicle purchase tax, the budget for 2026 is expected to increase by 22.2% compared to the 2025 execution amount, with the Ministry of Finance explaining that this is primarily based on anticipated growth in automobile sales and the resumption of half-rate vehicle purchase tax for new energy vehicles starting from January 1, 2026.

From the perspective of non-tax revenue, the budget for confiscated income in 2026 is expected to decline by 16.8% compared to the 2025 execution amount, mainly based on the expected confiscated income from cases investigated by customs, taxation, and judicial departments; the budget for paid use of state-owned resources (assets) is projected to decrease by 46.3% compared to the 2025 execution amount, primarily due to a significant increase in one-off income last year and a substantial increase in funds transferred to the government fund budget for special treasury bond interest payments.

Significant increase in equalization transfer payments

The Ministry of Finance’s “Explanation on the Budget for Central Transfer Payments to Localities for 2026” shows that the budget for central transfer payments to localities in 2026 is set at 10.415 trillion yuan, an increase of 2.2% compared to the 2025 execution amount. Among them, the budget for general transfer payments in 2026 is 9.477922 trillion yuan, an increase of 2.5% compared to the 2025 execution amount.

The Ministry of Finance pointed out that in 2026, based on unified rules, certain shared fiscal responsibilities for transfer payments and special transfer payment projects will be reduced by 5%, with the reduced funds fully used to increase financial support to localities and equally returned to the provinces from which they were reduced, maintaining overall fiscal stability.

In general transfer payments, the budget for equalization transfer payments in 2026 is set at 2.834 billion yuan, an increase of 3.7% compared to the 2025 execution amount, primarily to significantly increase equalization transfer payments and enhance local financial security; the budget for county-level basic financial guarantee mechanism incentive funding is expected to grow by 2.1% compared to the 2025 execution amount, mainly to encourage local governments to ensure basic livelihood, wages, and operational work at the grassroots level.

Starting from the autumn semester of 2025, China will implement a policy to exempt preschool education fees for the year before school, resulting in increased expenditures for 2026. Therefore, the budget for supporting the development of preschool education is projected to increase by 37.8% compared to the 2025 execution amount.

Based on estimates of the number of applicants for childcare subsidies, the budget for childcare subsidy funding in 2026 is expected to increase by 10.6% compared to the 2025 execution amount.

Additionally, as the subsidy funds for new energy vehicles will no longer be arranged after the settlement, the budget for energy-saving and emission-reduction subsidy funds is projected to decrease by 63.8% compared to the 2025 execution amount.

(Source: Securities Times)