China Implements Nearly $105 Billion Yuan in Tax and Fee Cuts in First Quarter, Tax Revenues Drop 16.4% YoY
China has continued to dramatically reduce tax and administrative fee levels in the wake of the COVID-19 outbreak.
Figures released by the State Taxation Administration (STA) on 29 April indicate that in the first quarter China implemented a total of 742.8 billion yuan (approx. USD$104.92 billion) in tax and fee reductions.
These tax cuts were comprised of two parts:
- 318.2 billion yuan in new tax and fee reductions resulting from preferential tax policies launched in 2020 to help deal with the impacts of COVID-19;
- 424.6 billion yuan in tax and fee reductions resulting from policies launched in 2019.
As a result of the cuts in tandem with the impacts of the COVID-19 outbreak, China’s first quarter tax revenues fell 16.4% YoY to 3.4826 trillion yuan (including export rebate deductions).
“Following the ongoing effects of a series of macro-economic adjustment policies, the economy and society have gradually trended back to normal admits normalisation during disease prevention,” said Cai Zili (蔡自力), STA official.
“Production and life are accelerating their return to normal, and we forecast that the decline in tax revenues will narrow in the second quarter as compared to the first quarter.”
According to Cai Zili big data analysis of VAT receipts indicates that the sales revenues of state-owned enterprises are already approaching 95% of comparable levels from last year.