China set to quicken tax cuts and reforms
Source: Agencies |
June 8, 2012, Friday
|
Print Edition
Print Edition
CHINA will accelerate tax cuts and reforms for selected industries this year to boost domestic consumption, Finance Minister Xie Xuren said in remarks published yesterday.
The pledge is the latest made by China's policymakers to cushion a slowdown in growth set to extend for a sixth straight quarter and leave the world's second-biggest economy on course for its weakest full year of expansion since 1999.
"In 2012, we will push forward tax reforms and try to make significant progress in some key sectors," Xie said, said a statement posted on the ministry's website, summarizing a speech made in late April.
"We will further improve the policy of cutting taxes for some sectors to spur domestic demand," he added.
So far, China has taken several steps to overhaul its tax regime, such as launching a pilot program to replace a business tax with a value-added tax, cutting import duties on some consumer goods and providing tax breaks for smaller firms.
Local media have reported that China may unveil a plan to expand its value-added tax beyond Shanghai as soon as in early June, with 10 cities and provinces on a waiting list.
Xie also pledged to make fiscal policy play a bigger role in adjusting China's economic structure, citing energy price reform and setting up a nationwide social security network.
He also called for the set-up of a risk-alert and prevention system to enhance supervision of local government debt.
China's local governments had racked up 10.7 trillion yuan (US$1.69 trillion) in debt by the end of 2010, mainly the legacy of an investment binge triggered by China's 4 trillion yuan stimulus plan to counter global financial crisis. About 45 percent of the debt will come due in the coming three years.
China has raised efforts to support the economy in the face of a deepening European debt crisis and slowing demand at home, fast-tracking infrastructure investment, providing consumption subsidies in some household sectors and pushing ahead with financial reforms to help safeguard growth.
The pledge is the latest made by China's policymakers to cushion a slowdown in growth set to extend for a sixth straight quarter and leave the world's second-biggest economy on course for its weakest full year of expansion since 1999.
"In 2012, we will push forward tax reforms and try to make significant progress in some key sectors," Xie said, said a statement posted on the ministry's website, summarizing a speech made in late April.
"We will further improve the policy of cutting taxes for some sectors to spur domestic demand," he added.
So far, China has taken several steps to overhaul its tax regime, such as launching a pilot program to replace a business tax with a value-added tax, cutting import duties on some consumer goods and providing tax breaks for smaller firms.
Local media have reported that China may unveil a plan to expand its value-added tax beyond Shanghai as soon as in early June, with 10 cities and provinces on a waiting list.
Xie also pledged to make fiscal policy play a bigger role in adjusting China's economic structure, citing energy price reform and setting up a nationwide social security network.
He also called for the set-up of a risk-alert and prevention system to enhance supervision of local government debt.
China's local governments had racked up 10.7 trillion yuan (US$1.69 trillion) in debt by the end of 2010, mainly the legacy of an investment binge triggered by China's 4 trillion yuan stimulus plan to counter global financial crisis. About 45 percent of the debt will come due in the coming three years.
China has raised efforts to support the economy in the face of a deepening European debt crisis and slowing demand at home, fast-tracking infrastructure investment, providing consumption subsidies in some household sectors and pushing ahead with financial reforms to help safeguard growth.
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