BUSINESS China's tax, fee cuts boost vitality of market entities

BUSINESS

China's tax, fee cuts boost vitality of market entities

Xinhua

17:36, August 12, 2020

Staffers at the Xuanhe District Tax Bureau of the State Administration of Taxation introduced tax reduction policies to taxpayers in Zhangjiakou, North China's Hebei province, on Nov 12, 2019. (Photo: Sipa)

BEIJING -- The orderly implementation of China's tax and fee cut policies has helped invigorate market entities and strengthen the sustainability of enterprises' development, Wang Jun, head of the State Taxation Administration told Xinhua in an interview.

In the first half of the year, China's tax and fee cuts totaled over 1.5 trillion yuan (about $216 billion).

For 100,000 key tax source enterprises, tax and fee burden dropped by 0.65 yuan per 100 yuan of the operating revenue, Wang said.

Citing an 11.5-percent year-on-year increase in profits of major industrial firms in June, Wang said it is clear that a considerable part of the growth is due to direct or indirect effects of the tax and fee cuts.

Around 92 percent of over 50 million small taxpayers in the country have been exempted from value-added tax, while for the remaining 8 percent or 4.4 million, the value-added tax rate has been lowered from 3 percent to 1 percent, according to Wang, who added that the tax has been exempted in Hubei.

"This has stimulated interest in entrepreneurship to a great extent," Wang said, noting that the newly-added market entities which handled tax-related business went up 7.1 percent year on year in the second quarter.

Besides, the purchase of high-tech equipment and services by 330,000 enterprises which enjoy preferential tax policies on research and development rose 22.3 percent in the second quarter, pointing to companies' continuous investment in science and technology amid the COVID-19 fallout.

To ensure that tax and fee cuts policies directly benefit market entities, authorities have simplified handling procedures and optimized online services, while training taxpayers and fee payers via "cloud classes."

Currently, corporate taxpayers can handle more than 90 percent of tax-related business online, according to the administration.

To boost the development of foreign trade firms, authorities have taken measures to facilitate export tax refunds, including promoting paperless tax rebate declarations, Wang said.

An analysis of taxation data shows that corporate sales are steadily recovering, with the manufacturing sector staging a faster recovery. In the meantime, new growth drivers reported faster growth and investment also picked up, Wang said.

In the second half of the year, authorities will continue to strictly implement preferential tax and fee polices, according to the official.

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