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April 5, 2019

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Campaign will bolster tax and fee cut policies

CHINA has launched a 50-day nationwide campaign to promote the firm implementation of the government’s tax and fee reduction policies, as businesses report they are more positive about the future.

The campaign is an extension of the country’s annual April program to elaborate on its taxation policies. The State Taxation Administration and its local branches organize activities, including seminars, online interviews and roadside shows.

Wang Jun, head of the administration, said enterprises will benefit from policies to reduce taxes and social insurance contributions.

Wang urged relevant authorities to map out roadmaps and timetables to implement the tax and fee reduction policies.

The country vowed to reduce the tax burden and social insurance contributions of enterprises by nearly 2 trillion yuan (US$298 billion) this year, according to a government work report released last month.

Meanwhile, entrepreneurs are more upbeat as a result of the government’s sustained efforts to lower the corporate burden.

“The implementation of larger scales of tax and fee cuts help improve enterprise profits, alleviate capital pressure and solidify our confidence in business development,” said Dai Jishuang, chairman of Shenyang Blower Works Group Corp.

On Monday, the country started to reduce the current value-added tax rate of 16 percent for manufacturing and other industries to 13 percent.

From May 1, the government will also cut the share of enterprise contributions to urban workers’ basic old-age insurance from 20 percent to 16 percent.

The new VAT cut policy will save 23.11 million yuan for the Shenyang Blower Works Group in 2019, according to Dai.

For China Delixi Holding Group, this year’s tax cuts will amount to 111 million yuan.

“This will enable us to invest more in scientific research and development, promoting the enterprise’s competence,” said Hu Chengzhong, chairman of the board of directors.

Bai Jingming, vice president of the Chinese Academy of Fiscal Sciences, said: “A universal tax cut will greatly ease the tax burden of companies in purchasing fixed assets like machinery equipment and save costs for equipment manufacturers, resulting in more room for investment.”

The massive corporate tax cuts this year showcased the central government’s efforts to inject more energy into economic development and to make sure market entities receive benefits, which will help stabilize market expectations of the economy, according to Bai.

Bai believes the move will unleash the Chinese people’s unlimited potential for innovation and creation, and boost the country’s high-quality development.

Chen Yanshun, chairman of the executive committee and CEO of BOE Technology Group Co, said: “The nationwide tax-cut policy is a guarantee of innovation-driven development.”

The tax-cut policy will help the BOE Technology Group lower VAT expenditure by 3.7 billion yuan this year, according to Chen.

“The BOE Technology Group will put the tax-cut bonus into scientific research and development, and make a greater contribution to the country’s strategic emerging industries,” said Chen.

The major target of such tax cuts in 2019 would be small and micro companies, which provide the majority of jobs, Bai said.

Policy-makers attach great importance to employment because it is an area that directly affects everyday life and determines the health and prospects of the economy.




 

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