China advances tax cuts

Updated:Jan 19,2018 09:46 AM


According to a national conference on taxation held on Jan 17, the total sum in tax cuts generated by the value-added tax (VAT) reform was approximately 2 trillion yuan ($310.8 billion) since its implementation in 2012. And in 2017 alone, preferential tax policies on mass entrepreneurship and innovation saved enterprises more than 500 billion yuan. This shows that tax reform has brought huge incentives to the market and greatly optimized the business environment.

An incentive for economic growth
VAT reform has greatly bolstered progress in supply-side structural reform, mass entrepreneurship and innovation, as well as the cultivation of new growth drivers, facilitating economic structural upgrading. Meanwhile, small and micro-profit enterprises and high-tech enterprises have also benefited substantially from an array of preferential tax policies, said Wang Jun, head of the State Administration of Taxation.

Aside from cracking down on tax evasion, China has continued to advance the implementation of preferential tax policies to benefit the market and enterprises, said Wang.

A driver of business environment upgrading
As presented in a report on ease of doing business released by the World Bank, China’s index of taxes paid saw an increase, of which the indicator for “time for paying taxes” moved up 32 places. This convincingly demonstrates that China’s efforts in taxation reform, streamlining administration, and optimizing government services paid off.

A surge in restructuring measures, highlighting streamlining multiple certificates into one, stepping up a credit-based taxation reform, and advancing online integrated taxation platforms, have jointly pushed forward the optimization of the business environment, said Wang.

A crucial project being fully implemented
During the taxation conference, Wang said that China’s taxation authorities will persistently work in accordance with the law, fully implement tax cuts, deter tax evasions, and curb any illegal tax collection activities.

He also added that a database system generated from Third Stage of the Golden Tax Project, a national tax information system launched last year, will be fully employed to consolidate the work of analysis, monitoring, and warning through taxation collection, in a bid to set up an index system to examine taxation’s impact on economic development.

He stressed that taxation authorities should fully implement tax cut policies to continue to optimize the business and taxation environment, promote entrepreneurship and innovation, and better stimulate market vitality and social creativity.