From July 1, charges on radio frequency uses in electricity, exit and entry travel documents such as private passports, registration of certain trademarks, will be reduced, according to latest announcement by the National Development and Reform Commission and the Ministry of Finance.
These measures are the most recent moves for fee reduction following the State Council executive meeting chaired by Premier Li Keqiang on April 3, 2019.
Other policies decided at the meeting included: charges on real estate registration will be cut or canceled. The coverage of patent applications and annual fee reductions will be expanded. Electricity costs in manufacturing will be reduced, and the average utility rates for general industrial and commercial businesses will be cut. Mobile internet service rates and broadband service rates for small and medium-sized enterprises will be cut by about 180 billion yuan. And a number of railway and port charges will be abolished or reduced.
Full delivery of these measures is expected to reduce government-levied charges and operating service charges by more than 300 billion yuan this year.
Li Xuhong, a professor with Beijing National Accounting Institute, said that this will further lessen the burden on businesses and individuals, and stimulate market development.
China is seeing the largest tax and fee cuts in history, with a total of nearly 2 trillion yuan of enterprises’ tax burdens and social insurance contributions to be reduced. Since January 1 this year, policies have been implemented to cut taxes for small and micro businesses, and introduce additional deductions for individual income tax payers.
Statistics shows that the growth rate of tax revenue in the first five months of 2019 is 2.2 percent, far below the same period of 2018. In 2019, the tax cuts and fee reduction have grown a total of 893 billion yuan nationwide, 816.8 billion yuan in tax cuts and 76.2 billion yuan in reduction of social insurance contributions.
The reform on value-added tax (VAT) has been furthered since April 1. From April to May, a total of 221.8 billion yuan of the tax burden was reduced for all industries. And from May 1, basic endowment insurance for urban employees paid by employers was lowered.
Apart from that, provincial-level governments have been given the authority to cut taxes up to 50 percent for small-scale VAT taxpayers under several local tax items, including resources tax, as well as education and local education surcharges.
Growth rate of education surcharges and local education surcharges fell by 16.7 percent and 20.3 percent respectively. Administrative fees went down by 1.3 percent from January to May, after a sharp 20.7 percent drop from the same period last year.
More powerful measures have been promoted to reduce fees. For examples, ownership registration fees for real estate such as garage and parking spots will be reduced from 550 yuan to 80 yuan each. And the registration fee for continued use of trademarks will go down from 1,000 yuan to 500 yuan. Payments by airline companies to the civil aviation development fund and national major water conservancy construction fund will be halved. Charges for national cultural programs faced by centrally administrated enterprises and institutions will be cut by half, effective until the end of 2024.
Liu Xiangdong, deputy head of Economy Research Department at China Center for International Economic Exchanges, said these measures have helped stabilized the development of small and medium-sized enterprises and provoked their vitality.
The National Development and Reform Commission will work with relevant departments to come up with major measures to reduce fees for enterprises in 2019, focusing on key fields such as energy, logistics and telecommunications, said the commission’s spokesman Yuan Da.
To cut expenditures in energy for enterprises, ten measures from four batches in 2018, such as to strengthen cost supervision on grid enterprises and to expand trade scale of electricity, have helped to achieve the goal to reduce general industrial and commercial electricity price by an average of 10 percent. According to data released by China Electricity Council, the costs of electricity usage for enterprises were cut by more than 125.7 billion yuan in 2018. The Government Work Report has required the average electricity price for general industrial and commercial to be cut by another 10 percent this year from last year.
To cut fees on logistics, policies will be adopted to promote differentiated toll collection on expressways, non-cash payment for trucks, and electronic toll collection for passenger cars. Railway freight rates will be lowered and regulated.