A large-scale tax reduction and more positive financial policies will be underway in 2019 as the Ministry of Finance and the State Taxation Administration have jointly issued a document on implementing the tax reduction and exemption policy for small and micro businesses.
The implementation period of this tax cut policy is from Jan 1, 2019, to Dec 31, 2021, which is expected to reduce the tax burden by up to 600 billion yuan for small and micro businesses over the three years.
According to officials of Ministry of Finance and State Taxation Administration, the new policy further relaxes the requirements for small and micro enterprises, and it will benefit 17.98 million enterprises nationwide. It covers 95 percent of small and micro taxpaying enterprises, and 98 percent of these are private enterprises.
The policy reduces enterprises' tax burden through measures such as increasing the tax exemptions threshold from 30,000 yuan per month sales volume to 100,000 yuan per month, relaxing the requirements of scientific and technological startups enjoying favorable tax policies, and allowing local authorities to reduce or exempt taxes up to 50 percent.
According to the authorities, more positive financial policies are underway with focus on four aspects, including large-scale tax reduction for enterprises, strengthened development on weak links in society and economy, stimulating consumption, and spending more financial income on ordinary people.
The Ministry of Finance and State Taxation Administration are expected to launch further tax reduction and exemption policies.
The upcoming policies will also include tax exemptions for small and medium-sized companies and high-tech enterprises, according to the official.
Once the specific tax cut measures take effect, they will stabilize economic growth and boost market sentiment, economists said.
Since May 1 last year, China has lowered VAT rates by 1 percentage point to 10 percent and 16 percent for the manufacturing, transportation and construction industries.
In addition to VAT cuts, the individual income tax cut in 2019 could boost consumption by 240 billion yuan, which could raise GDP growth by 0.3 percentage points, according to analysts.
(Source:ourjiangsu.com)
