China's tax and fee cuts, as well as large-scale value-added tax refunds, have not only eased some of the financial burdens faced by smaller firms on account of economic headwinds but also nurtured new growth drivers, officials and experts said on Wednesday.
Wang Daoshu, deputy head of the State Taxation Administration, said at a news briefing on Wednesday that the newly increased tax and fee cuts, together with VAT refunds and tax payment deferrals, amounted to some 3.7 trillion yuan ($523 billion) by Nov 10.
VAT credit refunds credited into taxpayers' accounts were worth 2.31 trillion yuan, some 3.5 times the total amount of tax credit refunds in 2021. The newly increased tax and fee cuts were worth 789.6 billion yuan by Nov 10, Wang said.
Wang disclosed that tax authorities at all levels have worked for a quicker and simplified VAT procedure. This was in line with the decisions of the State Council executive meeting in late October, where it was stressed that the average time for refunding newly added VAT credits in the manufacturing sector should be cut to two working days.
The manufacturing sector has received the bulk of benefits generated by the tax refund policy. Companies in this sector received some 617.6 billion yuan, or 26.7 percent of the total, in VAT refunds.
The refunds have eased some of the financial burdens on small and micro businesses hard hit by recent headwinds like COVID-19 disruptions, and thus played a crucial role in generating jobs, Wang said.
As a result, since the third quarter of this year, sales revenues of small and micro businesses increased by 0.8 percent year-on-year, he said.
"The large-scale VAT credit refunds worked effectively in helping businesses to counter COVID-19 disruptions and temporary uncertainties," said Li Xuhong, professor at the Beijing National Accounting Institute, adding the move has been widely welcomed as it proved to be a boon to the cash flows of certain troubled businesses.
Considering the central role played by the manufacturing sector, tax credit refunds have been leaning more heavily toward it, and this has helped it to recover, she said.
Data released by the Ministry of Finance on Wednesday showed China's fiscal revenue rose 5.1 percent year-on-year in the January-October period, excluding the impact of VAT credit rebates.