China’s tax cut policies have led to a reduction of over half a trillion yuan in levies for the period from January to April.
Data released by the State Taxation Administration on 30 May indicates that China’s total new tax reductions for the first four months of the year totalled 524.5 billion yuan.
The reduction is comprised of three main parts including:
- 193.4 billion yuan in cuts as a result of new tax reduction policies unveiled in 2019;
- 326.7 billion yuan in cuts as a result of the spillover effect of tax reduction policies implemented in 2018;
- 4.4 billion yuan as a result of tax reduction policies that expired in 2018 but whose implementation was continued on 2019.
The results of further valued-added tax reforms in 2019 have been most pronounced for the manufacturing sector, with a net tax reduction of 47.6 billion yuan for the period from January to April.
A further cut of 42 billion yuan as a result of the spillover effect of value-added tax rate reductions implemented last year has produced a total tax reduction of 89.6 billion yuan for the Chinese manufacturing sector during the first four months of 2019.