(Yicai Global) March 4 -- China issued policies to cut taxes and fees by CNY2 trillion (USD309.1 billion) last year to support firms hit by the Covid-19 pandemic, and a decision is expected soon on how long the policies will remain in place this year.
Many deputies of the National People's Congress and members of the Chinese People's Political Consultative Conference at the annual Two Sessions have said the policies eased the burden on companies during the pandemic.
Gree Electric Appliances paid CNY4 billion (USD618.2 million) less in taxes and fees and received refunds on export taxes of nearly CNY2.5 billion as well as excess input value-added tax credits of CNY740 million, said Dong Mingzhu, NPC deputy and the firm’s chair and president.
“The tax and fee cut policies have directly stabilized capital flows, effectively eased the operating burden on companies, stimulated their vitality and helped them develop,” Dong noted.
Micro and small firms also benefited from the policies. Zhang Rucai, NPC deputy and chair of a pot painting artware maker, said the firm’s value-added tax payments were slashed by 92 percent last year and its land-use tax cut was 50 percent thanks to the policies.
Companies will enjoy a greater discount in taxes and fees to support investment in research and development under existing corporate income tax regulations. Efort Intelligent Equipment enjoyed an earned income tax discount of CNY4.6 million last year and put all the money into R&D, said Xu Lijin, CPPCC member and the firm’s chair.
The tax and fee cut policies for transportation, life services, cinemas and other fields hit hard by the coronavirus were supposed to expire at the end of last year, but they have continued this year. But how long they will last has not yet been determined, and the decision is expected to be made at the Two Sessions, Yicai Global learned.
The Ministry of Finance recently said that China will continue the policies this year, saying the country will decide the amount to cut and make the policies continuous based on its financial ability and the demand for policies to help companies overcome difficulties.
Last year, 3.99 million taxpayers were allowed to defer tax payments totaling CNY29.2 billion, and gained refunds on export taxes worth CNY1.45 trillion, according to statistics from the State Taxation Administration.
Editor: Tom Litting