Start Asia China will take concrete steps to reduce the tax burden on private...

China will take concrete steps to reduce the tax burden on private companies and support better development of private companies

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The detailed guide sets out 26 measures to encourage the development of private enterprise, including significant tax cuts, in particular the reduction of VAT, the exemption for micro and small enterprises and technology start-ups, and the promotion of nominal tax rates on social security contributions.

Measures are also being taken to address the difficulties and high costs of private-sector finance, to simplify tax-paying procedures and to improve the competitive conditions for private-sector companies.

„China’s tax authority has always treated private companies on an equal footing,“ said Huang Yun, a senior official of the State Tax Bureau.

According to Huang, micro and small businesses have received tax exemptions of 143.7 billion yuan (18.1 billion euros) in the first three quarters, an increase of 41.3 percent over the previous year.

The private sector plays an important role in the Chinese economy. It contributes more than 50 percent to tax revenue, more than 60 percent to GDP, more than 70 percent to technological innovation, more than 80 percent to urban employment and more than 90 percent to new jobs and new businesses.