New fiscal measures to boost private firms

2023-08-08 08:18:03China Daily Editor : Li Yan ECNS App Download

Workers assemble wind turbine wheels at a factory in Lianyungang Economic and Technological Development Zone, East China's Jiangsu province, Feb 28, 2023. (Photo by Geng Yuhe/for China Daily)

China's State Taxation Administration launched 28 measures to facilitate tax payments for small and medium-sized enterprises and self-employed individuals on Sunday, as part of the country's accelerated efforts to drive development of the private sector.

The new measures mainly include extending the duration of certain tax exemptions, cutting red tape on tax payments as well as optimizing cross-border tax services.

For instance, taxpayers who did not benefit from extra tax deductions on research and development costs during the July tax period can still enjoy such benefits through August and September. More efforts will also be made by the tax authority to cooperate with related departments to build up cases on R&D project tax payments, so that eligible SMEs can better understand policies.

"Such measures will help taxpayers fully save on operating costs through R&D tax deductions. They will furthermore stimulate their vitality and drive their innovation capability, all of which will be strong drivers of the development of the country's private sector," said Li Xuhong, head of fiscal taxation policy and application at the Beijing National Accounting Institute.

"The new measures directly address some common questions and issues faced by private enterprises regarding tax payments and related policies, and help them better enjoy policy benefits," Li said.

She added that the most recent measures are a continuation of preferential policies for private enterprises, which are mostly SMEs and self-employed individuals. The Ministry of Industry and Information Technology said that in China, private companies, most of which are smaller businesses, contribute nearly 50 percent of the nation's tax revenue and produce 60 percent of its GDP.

Prior to the 28 measures launched on Sunday, the STA had already launched four batches of 81 supportive measures on taxes. In the first half, tax and fee cuts — and tax refunds and deferrals for private taxpayers — hit 704.9 billion yuan ($97.89 billion), accounting for 76 percent of the total.

Notably, on Sunday, six targeted measures were launched to promote cross-border tax services, including simplifying tax declaration procedures, promoting non-declaration of information, such as export tax rebate invoices, as well as promoting cooperation with tax authorities from economies participating in the Belt and Road Initiative.

Fan Yong, dean of the School of Public Finance and Taxation of the Central University of Finance and Economics, said that such measures will further improve convenience for private enterprises in handling export tax rebates and offer a better tax environment for the private economy.

"The tax system and tax-related cross-border service capabilities have become important guarantees to facilitate overseas investment by Chinese enterprises. Thus, such measures will greatly drive development of the country's private companies on the global stage," Fan said.

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