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Chinese SMEs benefit from tax reduction measures
China has cut a total of 816.8 billion yuan($119 billion)of tax in the first five months of this year,substantially contributing to the growth of its small-and medium-sized enterprises(SMEs)that account for over 99 percent of the country’s total registered enterprises.
The new round of measures implemented this year,including the inclusive tax deduction and exemption policies for SMEs,as well as the deepened VAT reform,have effectively cut production costs for enterprises and stimulated the passion of entrepreneurs.
Anhui Hetian Electric Co.,Ltd.in east China’s Anhui province,with total assets of 43 million yuan,was not considered an SME.After China relaxed the qualification conditions for small and low-profit enterprises,the company can finally enjoy relevant favorable policies.Its enterprise income tax in the second quarter of this year is estimated at 14,700 yuan,down by nearly 70 percent from a year ago.
“The threshold of VAT for small-scale taxpayers was raised from 30,000 yuan to 100,000,which meant we have been almost exempt from paying tax,”said Wu Cong,owner of a bed&breakfast hotel in east China’s Zhejiang province,adding that the cost reduction can be used to improve their services further.
Li Xuhong,professor at the Beijing National Accounting Institute,noted that SMEs have high tax compliance cost,and therefore,it is a positive move to implement inclusive tax deduction and exemption policies for them.It will facilitate employment,promote social stability,and enhance scientific innovation,Li said.
Affected by the current situation of global trade,some export enterprises are facing high pressure,and some entrepreneurs also find themselves in a dilemma with high costs.
In a diverse market system,SMEs in different industries and with different development are facing various difficulties and challenges.Thanks to the targeted tax reduction measures introduced by China this year,most SMEs in the country can enjoy tailored favorable policies.
An electronic paper producer based in northeast China’s Dalian,which exports the majority of its products to South Korea,said they saved over 2.6 million yuan in purchasing raw materials after the VAT rate dropped from 16 to 13 percent.
“Our company saved around 1.2 million yuan this year,which means we can invest 20 percent more in R&D and our sales volume this year could hit 70 million yuan with higher profitability,”said Rong Zhijun,chairman of a Shenyang-based manufacturer of numerically-controlled machine tools.
An official from China’s State Taxation Administration disclosed that the taxation department would stay true to its original aspiration and keep its mission firmly in mind,to better serve the people with more concrete actions,further stimulate the energy of SMEs,and promote high-quality economic development.
Source：People\'s Daily Online
Release Time：2019-07-02 10:04:34
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