Chinese entrepreneurs from all walks of life are feeling upbeat following the government’s sustained efforts to lower the corporate burden.
“The implementation of larger-scale tax and fee cuts help improve enterprise profits， alleviate capital pressure， and solidify our confidence in business development，” said Dai Jishuang， Chairman of the Shenyang Blower Works Group Corp.， at a symposium hosted by the State Taxation Administration in April.
Following colossal tax and fee cuts of around 1.3 trillion yuan （$194 billion） in 2018， China will further reduce the tax burden and the social insurance contributions of enterprises by nearly 2 trillion yuan （$298 billion） in 2019.
On April 1， the country started to reduce the value-added tax （VAT） rate of 16 percent for manufacturing and other industries to 13 percent. Starting from May 1， the government will also cut the share of enterprise contributions to urban workers’basic old-age insurance from 20 percent to 16 percent.
The new VAT is set to save 23.11 million yuan （$3.44 million） for the Shenyang Blower Works Group Corp. in 2019， according to Dai.
For China Delixi Holding Group Co. Ltd.， this year’s tax cuts will amount to 111 million yuan （$16.5 million）. “This will enable us to invest more in scientifi c research and development （R&D）， promoting the enterprise’s competence，” said Hu Chengzhong， Chairman of the Board of Directors and CEO of the company， which operates in electrical， energy， mining and other industries.
“A universal tax cut will significantly ease the tax burden of companies in purchasing fixed assets like machinery equipment， resulting in more room for investment，” said Bai Jingming， Vice President of the Chinese Academy of Fiscal Sciences.
The massive corporate tax cuts this year showcased the Central Government’s efforts to inject more energy into economic development and to make sure market entities receive benefi ts， which will help stabilize market expectations of the economy， according to Bai.
Bai believes the move will unleash the potential in innovation and boost the nation’s high-quality development.
“The nationwide tax cut policy is a guarantee of innovation-driven development，” said Chen Yanshun， Chairman of the Executive Committee and CEO of BOE Technology Group Co. Ltd.
The tax cut policy will help the com- pany lower VAT expenditure by 3.7 billion yuan （$551 million） this year， according to Chen.
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