The head of China’s tax department has highlighted the ability of reductions to taxes and administrative fees to help spur economic activity in the wake of the COVID-19 pandemic.
Wang Jun (王军), head of the State Taxation Administration (STA) said to Shanghai Securities News that in the first half of 2020 China had increased tax and administrative fee reductions by 1.5054 trillion yuan (USD$216.53 billion), with the full year figure projected to be 2.5 trillion yuan.
According to Wang most of the market actors applying for new tax reductions in the second quarter were micro and small enterprises and individual proprietors, who posted a YoY increase of 7.1%.
330,000 enterprises in China enjoy preferential tax policies for research and development costs, while growth in purchases of advanced equipment and services grew 22.3% in the quarter.
Wang said that in the second half STA will continue to support the central government’s call to “vigorously protect and spur the vitality of market actors,” as well as “strictly forbid any form of increase in the unreasonable burden of market actors.”