Recent tax data reveals that activity in the capital markets has spurred growth in securities trading stamp tax, corporate income tax, personal income tax, and domestic value-added tax. This year, the market has been notably vibrant, with average daily stock turnover in A-shares reaching 2.7 trillion yuan in the first eight months, up 72.8% from the same period last year. This uptick has accelerated growth in related taxes and sector revenues, with securities trading stamp tax climbing by 82%.
Securities trading stamp tax is levied on the value of stock sell transactions, withheld by the securities registration and settlement institution. Its revenue scale is highly correlated with market activity. The larger the stock turnover and the more frequent the trades, the broader the tax base and the faster the tax revenue grows. Consequently, the sharp rise in this tax directly signals heightened trading enthusiasm and stronger investor participation in the A-share market. This positive shift stems from coordinated efforts across policy, asset, and capital fronts in the capital markets: investment and financing reforms stabilizing market expectations, high-quality asset supply boosting investment appeal, and wealth allocation transitions broadening funding sources. These forces align to promote vibrant trading and reflect an improving market ecosystem that more effectively serves the real economy.
Where to begin
First, the comprehensive reforms in capital market investment and financing are advancing, stabilizing market expectations. In recent years, securities regulators have deepened these reforms, enhancing the inclusiveness of the issuance and listing system on the financing side and improving mechanisms for long-term capital entry on the investment side. Both ends are developing in tandem to refine the market structure. On the financing end, reforms to the STAR and ChiNext boards are progressing. The STAR market has introduced a growth tier and expanded its fifth set of listing criteria to fields like artificial intelligence, commercial aerospace, and low-altitude economy. Meanwhile, the ChiNext board has launched a third set of listing standards and added a fourth, supporting quality unprofitable companies in going public. On the investment end, channels for long-term capital are broadening. Bank wealth management products are now included in the scope of offline investors, with higher equity investment ratios permitted for insurance funds, social security funds, and pension funds, alongside improved long-cycle assessments. These coordinated efforts elevate the market’s capacity to serve tech enterprises, strengthen long-term capital allocation intentions, optimize supply-demand structures, and steady investor expectations, laying the institutional groundwork for active A-share trading.
Why the surge matters
Second, the quality of listed companies is steadily rising, expanding the supply of premium assets. This year, hard-tech companies are accelerating their listings, with quality targets in semiconductors, artificial intelligence, and new materials continuously appearing. The asset structure of the A-share market is progressively improving, with a notable increase in tech-related content. At the same time, listed companies, especially tech firms, are entering a phase of performance delivery. For instance, on the STAR market, companies collectively reported operating revenue of 1.01 trillion yuan and net profits of 144.88 billion yuan in the first half, up 38.6% and 437.6% year-on-year, respectively. This improvement in profitability and growth potential enriches the menu of quality assets available for allocation. The synergy between asset expansion and performance enhancement bolsters investor confidence and trading intent, driving up stock turnover.
Beyond the tax figure
Third, household wealth allocation is diversifying, with a stronger willingness to bring incremental capital into the market. Amid a declining interest rate environment, yields on traditional fixed-income products like deposits and wealth management are dropping, making equity assets relatively more attractive. This is prompting households to shift their portfolios from fixed-income toward equity assets. Additionally, the emerging wealth effect in the stock market is reinforcing capital inflow intentions. Monthly new account openings in A-shares have remained at elevated levels this year, with incremental capital steadily entering the market, significantly enhancing liquidity. Nonetheless, it is crucial to view the high growth in securities trading stamp tax with a rational perspective. While it signals a recovery in market activity, attention should also be paid to deeper indicators such as market internal stability, listed company quality, and the proportion of long-term capital, avoiding judgments based solely on single tax data. Overall, the substantial rise in securities trading stamp tax serves as a key window into the revival of A-share market activity. Through this metric, one can observe the effectiveness of investment and financing reforms, the steady improvement in A-share asset quality, and the persistent growth in investor willingness to deploy new funds.