China cuts taxes and administrative fees by over 2.5 trillion yuan in 2020
China rolled out 28 targeted and favorable tax policies in seven batches in 2020, cutting taxes and administrative fees by over 2.5 trillion yuan (about $390 billion) for companies.
Due to the COVID-19 outbreak, many small and micro businesses and self-employed people encountered difficulties in 2020, including fewer customers, rising costs, and lack of capital.
To ease their burden, Chinese taxation authorities introduced a package of measures to cut taxes and administrative fees for them last year.
For example, the validity period of policies that allow small and micro businesses to delay paying income tax and that reduce and exempt added-value tax for small-scale taxpayers were prolonged until the end of 2020, effectively stabilizing the capital flow of small and micro businesses.
Under these policies, over 90 percent of small-scale taxpayers were exempted from added-value tax; those who still needed to pay added-value tax were charged at a rate of 1 percent, down from the former 3 percent; taxpayers in central China's Hubei province, which was once hit hard by the epidemic, were all exempted from added-value tax.
Last year, a large amount of small and micro businesses benefited from these favorable tax policies.
Xiong Meigui, who runs an automobile repair shop in Dexing, east China's Jiangxi province, heard the news of reducing and exempting added-value tax for small-scale taxpayers when she was applying for invoice issuance at a tax service hall.
Thanks to the policy, Xiong enjoyed the 1 percent tax rate and paid merely 1,932 yuan for added-value tax of goods and services worth of over 190,000 yuan, over 3,000 yuan less than the tax payment she expected, according to Xiong.
In recent years, cutting taxes and administrative fees has been a focus in the fiscal and taxation field, said Zhu Qing, deputy head of the Chinese Tax Institute as well as a professor at the School of Finance, Renmin University of China.
China's tax and administrative fee cuts hit a record high in 2020, Zhu noted, who believes that such taxation policies played a significant role in China's steady GDP growth in 2020.
Small and micro enterprises are an important force in creating jobs and invigorating the national economy.
Read More at http://en.people.cn/n3/2021/0203/c90000-9815744.html