China’s Finance Ministry: More Tax Cuts On The Way

China will conduct tax cuts on a larger scale to ease the burden of small- and micro-sized enterprises and the manufacturing industry, according to a press conference in Beijing on Tuesday.

 

In 2019, there will be a larger tax cut and more fee reductions based on 2018’s efforts, said Xu Hongcai, Assistant Minister of Finance at the conference. To enhance the intensity of tax cuts, Xu said that the country will adhere to the combination of inclusive tax cuts and structural tax cuts and shore up real economy.

 

Inclusive tax cuts for small businesses

 

China will implement inclusive tax relief for small and micro enterprises. For example, the threshold for small-scale taxpayers of value-added tax (VAT) will be raised from 30,000 yuan (4,400 U.S. dollars) to 100,000 yuan (14,700 dollars) in monthly sales.

 

Criteria for small and low-profit enterprises will be further relaxed and more preferential efforts will be introduced. Enterprises with total assets under 50 million yuan (7.3 million dollars), less than 300 employees and a taxable income of less than three million yuan (0.44 million dollars), in this case, will be classified as small and low-profit enterprises.

 

 

It is estimated that about 1,789 enterprises are in this category. The preferential policy will cover more than 95 percent of corporate taxpayers, and 98 percent of them are private enterprises, said the ministry spokesperson.

 

Local governments will be allowed to reduce resources taxes, city maintenance tax, stamp duty and urban land use tax and other local taxes, as well as education surcharge for small-scale taxpayers by no more than 50 percent.

 

Further deepen VAT reform

 

Last year, China deepened the reform on value-added tax (VAT), which has reduced taxes for enterprises by more than 2 trillion yuan (about 295.6 billion U.S. dollars).

 

The ministry is reviewing the new VAT reform proposal and it will be officially rolled out during the two sessions this March.

 

Substantial tax cuts for individual taxpayers were introduced earlier this year with six specific measures including rent, housing loan, children’s education, elderly care and health treatment for serious diseases.

 

Meanwhile, the ministry will work with other departments to further reduce the social insurance premium rate, and further reduce the insurance burden of enterprises. It will further promote fee reductions, standardize local fee collection, and investigate and regulate arbitrary charges.

 

Source: CGTN