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Cuts in taxes and fees for enterprises a positive and helpful policy choice

China Daily | Updated: 2017-03-17 07:12

Cuts in taxes and fees for enterprises a positive and helpful policy choice

A little girl passes by a reform slogan. [Photo/IC]

SPEAKING TO THE MEDIA on Wednesday at the conclusion of the annual session of the country's top legislature, Premier Li Keqiang said that the government will reduce the burden of taxes and administrative fees on enterprises. Beijing News commented on Thursday:

Premier Li's vow to cut the taxes and fees for enterprises echoes the call of the whole of society, and will unleash further potential for economic growth.

It should be noted that cutting taxes and fees means the government will share some of its financial income with enterprises, demonstrating its determination to boost the economy and help enterprises. Li said that reducing the burden of taxes and fees on enterprises will help to promote their competitiveness.

For years, one economy after another has been resorting to trade protectionism to maintain the share of the global market their enterprises have. With less taxes and fees to pay, Chinese enterprises will have more money to invest in making themselves more competitive.

Of course, cutting taxes and fees alone will not encourage enterprises to invest in research and development to boost their competitiveness. Without the confidence that they will make more money by doing so, they might simply divide the money they would have paid as tax and fees among their executives and shareholders.

That requires the advancing of reforms. The economic structure must be further adjusted and monopolies broken, if domestic enterprises are to perform better in the market and win in the global competition.

Reducing the burden of taxes and fees on enterprises is a good policy choice, and it is becoming a key part of China's positive monetary and financial policy. Its positive effects will become evident in the long run.

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