China's fiscal revenue rose 7.3 percent year on year to 1.546 trillion yuan (234.8 billion U.S. dollars) in May, data from the Ministry of Finance showed on Monday.
The revenue growth was down from the 14.4-percent gain posted for April.
The ministry expects revenue growth to be further affected by policies in the following months as downward pressure on China's economic growth remain.
China's economy expanded 6.7 percent year on year in the first quarter, slowing further from the previous quarter.
In the face of continued economic headwinds, China has made supply-side reform an economic priority, and tax cuts to lower costs for business are a major policy option, putting further pressure on revenue growth.
To break this down, the central government collected 756.9 billion yuan in fiscal revenue, down 2.2 percent year on year, while local governments saw fiscal revenue expand 18.3 percent to 789.2 billion yuan.
Thanks to the warming housing market in some regions, real estate business taxes went up 11.4 percent year on year to 33.3 billion yuan. Natural resource taxes plunged 25.9 percent due to sluggish crude oil and coal prices.
In May, fiscal spending gained 17.6 percent to hit 1.546 trillion yuan, bringing expenditure for the January-May period to 6.653 trillion yuan, up 13.6 percent year on year.
To cushion the blow from sluggish revenue growth and balance the need for proactive fiscal policies to support growth, China plans to increase its deficit-to-GDP ratio to 3 percent this year from 2.3 percent last year.
