Lowering corporate burden pays off

Source: Xinhua | 2019-03-19

China’s sustained efforts to lower the corporate burden will help stabilize employment, investment and growth expectations, said Bai Jingming, vice president of the Chinese Academy of Fiscal Sciences.

Following colossal tax and fee cuts of around 1.3 trillion yuan (US$194 billion) in 2018, China will reduce the tax burdens and social insurance contributions of enterprises by nearly 2 trillion yuan this year.

Small and micro companies, which provide the majority of jobs, would be the major target of such cuts in 2019, showing a clear pro-employment policy tendency, said Bai.

This year, China will reduce the current value-added tax of 16 percent for manufacturing and other industries to 13 percent, and lower the rate for such industries as transport and construction from 10 to 9 percent.

A universal cut will greatly ease the tax burden of companies in purchasing fixed assets like machinery equipment and save costs for equipment manufacturers, resulting in more room for investment, Bai said.

Massive corporate tax cuts this year showcased the central government’s efforts to inject more energy into economic development and ensure market entities receive benefits.