As a series of new policies took effect on July 1, the amount of corporate tax and fee cuts this year reached 1 trillion yuan ($147.5 billion), which is a remarkable benefit to Chinese enterprises.
It is an answer to a social request and can help enterprises stay competitive in the global market, as many countries, such as the US, UK and India, have issued tax cut policies facing the sluggish economic recovery, according to Xinhua.
It has also fulfilled Premier Li Keqiang’s promise made at the two sessions in March.
Taxes equaling 382.5 billion yuan have been cut. Starting July 1, the value-added tax structure was simplified by cutting the 13-percent tax bracket. More small and micro enterprises became eligible for corporate tax preference status.
Administrative fees for enterprises have been cut by 618.5 billion yuan. Several fees charged for special government funds and public utilities were canceled.
Zhu Rong, senior taxation manager at Siemens China, said costs for Shanghai-based Siemens branch has been cut by over 1 million yuan this year thanks to the fee cuts.
Electricity rates were reduced. For example, the rate per kilowatt-hour (kWh) for Xiaoshan international airport in East China’s Hangzhou city has been reduced by 0.03 yuan, which saved the company 2 million yuan in the first half of the year.
“The power price reform and the cutting of government funds will cut corporate burdens by 65.5 billion yuan for the entire year,” said an official from the National Development and Reform Commission (NDRC).
A list of administrative charges raised by central and regional authorities has been published on the website of the Ministry of Finance for public supervision. “Charges that are not listed should be suspended. If citizens and companies are levied any non-listed charges, they have the right to refuse and report to related departments,” a senior official from the Ministry of Finance said.
Room for more cuts
There’s still room to cut corporate burdens, said Nan Cunhui, board chairman of Chint Group, a company that focuses on industrial electrical equipment production and clean energy. “The government should implement the preferential policies firmly, cut energy and financing costs,” he said.
In addition, the government is trying to regulate random charges by some official industrial associations and intermediary agencies.
By the end of August, NDRC and provincial governments will start a comprehensive inspection of those illegal random charges, and will punish the officials responsible.