(Yicai Global) Dec. 30 -- China will continue some cuts to personal income taxes that were due to expire at the end of this year to ease the financial burden on low- and middle-income groups.

The State Council, or cabinet, decided to extend the preferential tax policies in a meeting held yesterday. They are expected to result in CNY110 billion (USD17.3 billion) less tax being collected next year, according to a press release on its website.

The first, which was extended through 2023, divides the year-end bonus by 12 and taxes it on a monthly basis rather than an annual one. If a bonus is CNY10,000 (USD1,570), a worker would pay just CNY300 (USD47) in tax, or 3 percent, as it falls in the first tax band. Without the policy, the bonus would be added to total annual income, moving the worker into the next tax band, resulting in a CNY1,000 (USD157) levy, equal to a 10 percent rate. This tax break came in at the end of 2018.

Its beneficiaries are mostly blue- and white-collar workers, Tian Zhiwei, vice director at the Institute of Public Policy and Governance at Shanghai University of Finance and Economics, told Yicai Global. The policy’s continuation will help to lighten their tax load, support middle-income earners, and underpin employment and consumption, Tian added.

Under the second policy, also prolonged till the end of 2023, workers whose annual income does not exceed CNY120,000 (USD18,840) and who need to file a tax return will be expect from doing so if the amount in arrears is no more than CNY400. Those earning below CNY120,000 a year will not need to file an assessment.

The third tax break, which separates equity incentives from total annual income for tax purposes, will now continue through next year.

The extension of these three preferential policies is seen as a prelude to further reactions in taxes and fee in 2022, after the government cut them in recent years. Taxpayers saved an additional CNY1 trillion (USD157 billion) this year, according to an annual meeting the finance ministry held on Dec. 27.

Editors: Dou Shicong, Futura Costaglione