China plans reductions in taxes by over $190 billion

Baku. 4 March. REPORT.AZ/ The Chinese government will propose a detailed plan to the top legislature this week to reduce taxes and fees, with an annual target that would cut more than 1.3 trillion yuan ($194 billion) to promote manufacturing and strengthen private companies' confidence, high-ranking officials said, Report informs citing the China Daily.

Ren Rongfa, deputy head of the State Taxation Administration, said that tax and fee cuts figure prominently in the tax authorities' work this year.

"We have updated the tax levy system and statistical accounting system to prepare for the further reduction," Ren said.

If the tax cut proposals are passed by the NPC, the value-added taxes may be lowered by 800 billion yuan overall, according to Robin Xing, chief economist in China for Morgan Stanley. He expected the VAT rates to be lowered by 1 to 2 percentage points for each tax bracket.

"The move is likely to lift companies' profits by 2 percent," Xing said. "The effect will be seen later in lower consumer product prices and higher profits by manufacturers."

As previously reported by the the State Administration of Taxation in 2018, China implemented a plan to reduce the tax burden on the economy. The amount of taxes and fees was reduced by $ 184 billion.