China is expected to cut 2.3 trillion yuan ($330 million) in taxes and fees in 2019, Securities Daily reported on Tuesday.
In the first three quarters of this year, a total of 1.78 trillion yuan was cut in taxes and fees, including 1.51 trillion yuan in tax cuts and 272.5 billion yuan in social security fee cuts, according to the latest statistics of the State Taxation Administration.
Scale of this year’s taxes and fees cut, covering all enterprises and individuals, is unprecedented and the whole society has benefited from it, said Zhang Yiqun, deputy director of China Special Committee on Budget Performance.
Tax and fee cut has played important role in energizing main body of the market, transforming economy, adjusting and upgrading industrial structure, and improving households’ wellbeing, Zhang said.
China’s tax and fee cut has been a universal benefit and in the first three quarters of this year a total of 442.6 billion yuan additional individual income tax was cut, which was a reduction of 1,764 yuan per person, statistics from the State Taxation Administration showed.
In the same period, a total of 182.7 billion yuan was added to tax cuts under the preferential policies for small and micro-enterprises, the main force of innovation and employment.
Deepening VAT or value-added tax reform is a focus of this year’s tax and fee cut and the lowered VAT rates starting April 1 would effectively reduce the real burden on market entities and help further develop the Chinese economy, said Li Jun, partner of China indirect tax services at PWC.
In the first three quarters of this year, the lowering of value-added tax (VAT) rates starting April 1 contributed to a tax reduction of 703.5 billion yuan, data from the State Taxation Administration showed.
Over one trillion yuan VAT is expected to be reduced this year, accounting for a half of the total tax and fee cut as a whole, according to Zhang.
The effect of VAT reduction is not limited to reduce enterprises’ tax burden in quantity and scale and its further significance is to promote enterprises to achieve high-tech and high-quality development, which plays a crucial role in maintaining Chinese economic development at a reasonable range, Zhang said.