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Tax and fee cut policies reduce burdens, boost growth

By Yang Yang | chinadaily.com.cn | Updated: 2020-05-28 10:49
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A cashier at a bank in Taiyuan, Shanxi province counts renminbi notes. [Photo/China News Service]

The large-scale tax and fee cut policies proved to be effective in 2019, the State Taxation Administration said on Thursday.

A total of 2.36 trillion yuan ($330 billion) was accumulatively cut in taxes and fees last year, accounting for 2.39 percent of GDP, according to an assessment report on the effectiveness of tax cuts and fee reductions in 2019.

The policies effectively reduced tax burdens of companies in manufacturing sector and small and micro businesses and vigorously drove consumption, investment and employment growth.

About 97.5 percent surveyed enterprises have high sense of acquisition and satisfaction due to the effective policies, said the report co-released by the Chinese Tax Institute and the National Academy of Economic Strategy at the Chinese Academy of Social Sciences.

The reduction of taxes and fees has played an important role in improving business operations with 66 percent of surveyed enterprises increasing operating income, 79.6 percent increasing profits, and 41.8 percent using tax cuts, fees and dividends mainly to raise their investment in research and development.

The policies of tax and fee cuts in 2019 contributed 0.8 percentage points to GDP growth, 0.87 percentage points to retail sales of consumer goods, and 0.58 percentage points to fixed-asset investment increase.

Policies to reduce tax and fee in 2019 helped create 3.76 million jobs, and 50.2 percent of businesses used tax and fee cuts to create more jobs and raise wages, especially in wholesale and retail, manufacturing and construction industries.

China will take further steps in 2020 to consolidate and expand its achievements in cutting taxes and fees, according to the State Taxation Administration.

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