The head of China’s Ministry of Finance says that tax reforms slated for introduction this year will provide greater support to certain key industries as well as the country’s small and medium-sized enterprises.
The 2018 Government Work Report flagged major reforms to the Chinese taxation system this year, including a sizeable in the threshold for personal income tax.
At press conference held on 7 March as part of the convening of the 13th National People’s Congress in Beijing, MOFCOM head Xiao Jie (肖捷) said that this year’s reforms would focus on in particular on reducing the tax burden for SME’s.
“[We will] continue to reform and improve the value-added tax system and rationally adjust tax rates, with a focus on reducing the tax rates for sectors such as manufacturing, transportation and delivery,” said Xiao. “The goal is to support the growth of the real economy.”
“I must especially emphasise that this year we will expand the vigour of support for small and medium-sized enterprises.
“The main thing will be the unification of standards for the annual sales amounts of small-scale tax payers and the large-scale expansion of the scope of micro-enterprises that enjoy preferential policies for halving income tax, enabling more enterprises to enjoy these benefits.
“We will also give consideration to applying preferential tax policies for venture investments and angel investments on a nation-wide basis, and provide a one-time pre-tax deduction for the purchase of new equipment and instruments worth under 5 million yuan by enterprises.
“We forecast that the implementation of the aforementioned tax policies will reduce the full year tax burden by over 800 billion yuan, while at the same time our further standardisation of fees for government funds and administrative entities and fees in relation to business services will reduce the full year cost burden by over 300 billion yuan.”