China has recently specified 19 tasks in eight aspects to reduce the costs of financing, labour, energy, land and other factors of production as well as institutional transaction costs for market entities.
The Economic Information Daily Tuesday, said that a government circular stated that among these tasks, a sustained and reasonable reduction of tax burdens tops the list.
Luo Zhiheng, deputy head and chief macro researcher of Yuekai Securities Institute based in south China’s Guangdong Province, said that this time tax and fee cuts put more emphasis on restructuring, innovation promotion and risk prevention.
Zhiheng said that the circular stipulates that for the portion of taxable income less than one million yuan, the Value-Added Tax (VAT) would be halved, which specifically targets small-scale taxpayers, small and micro-sized businesses, and individual businesses.
According to the circular, the advanced manufacturing industry would be fully refunded on a monthly basis for incremental VAT credits, so as to support innovation and reduce the occupation of funds for advanced manufacturing.
Besides, efforts would be taken to lower the threshold for enterprises to enjoy tax and fee cuts, and streamline related procedures.
The circular also puts forward to continue to unleash the reform potential of the Loan Prime Rate (LPR), and consolidate the results of the decline in real loan interest rates, to promote a steady decline in the overall financing cost of enterprises.
Efforts would also be made to guide banks to expand credit lending, continue to increase the number of first borrowers, and promote loan repayment on demand.
This is to enable more funds to flow into small and micro-sized businesses, individual businesses, and new types of agricultural businesses, and provide targeted support to enterprises in industries affected by the COVID-19 pandemic.
Terms of energy consumption, the circular proposes to stabilize the electricity prices in transmission, distribution, sales, and emphasizes to stimulate manufacturing enterprises to participate in electricity trading and reduce the energy consumption cost of enterprises with the help of market-oriented reform. (Xinhua/NAN)