(Yicai Global) Sept. 15 -- China will postpone tax payments by micro, small, and medium-sized manufacturers for a third time since last October to ease the impact of the Covid-19 pandemic.

The decision taken by the State Council, China’s cabinet, will see payment of CNY440 billion (USD63 billion) of taxes deferred, it said. 

To ease the impact of rising costs, the State Taxation Administration and the Ministry of Finance decided in October to delay payment of some taxes due in the final quarter of last year. They extended that for a further six months in February, and added some other taxes and fees for the first and second quarters of this year to the deferral list.

Manufacturers faced huge production and sales challenges because of Covid-19 outbreaks this year, Tian Zhiwei, vice president of the Institute of Public Policy and Governance at Shanghai University of Finance and Economics, told Yicai Global. Tax deferrals are a significant help akin to giving them an interest-free loan, he added.

Deferred taxes for smaller manufacturing enterprises stood at CNY525.7 billion (USD75.5 billion) as of July 20, SAT data showed.

Wuhan Sunhy Biology expects to see payments of CNY1.8 million (USD260,000) postponed thanks to the policy, Zhou Qiong, an accountant at the biotech company told Yicai Global.

The finance chief at Wuhan Furukawa Automotive Systems, Zhang Feng, said he is looking forward to the policy details. The firm previously enjoyed a tax deferral of about CNY7.8 million, allowing it to buy equipment earlier and accelerate investment in new production lines.

In the first seven months of this year, revenues at Chinese industrial enterprises rose 8.8 percent from the same period a year earlier, keeping up a relatively quick pace of growth. But corporate profits overall fell 1.1 percent.

The State Council also decided to refund new value-added input tax credits for the manufacturing sector immediately on application within two working days and another CNY32 billion tax rebate for the sector in the next four months.

Editors: Shi Yi, Futura Costaglione