China says it will ensure costs for businesses don’t rise due to tax collection
Photo: image.baidu.com

The State Council, China’s cabinet, has recently vowed to lower the social security tax rate to make sure that the costs for businesses don’t increase, in response to public concerns that small and medium-sized businesses may face higher financial burden under the ongoing tax reforms.

Chaired by Premier Li Keqiang, a State Council executive meeting this Thursday confirmed to adopt the newly revised personal income tax plan to raise the threshold of taxable income from 3,500 yuan to 5,000 yuan from October 1, while losing no time in deciding a lower social security tax rate to reduce corporate costs.

“A large majority of individual taxpayers could benefit from the tax cut, especially for the middle and low income group, said Cheng Lihua, the vice finance minister, at a press meeting. She indicated those who earn no more than 20,000 yuan per month will see their income tax cut by over a half.

For the first time, expenses on child education, on-the-job training, medical treatment, mortgage interest payments, rent and care for the elderly are confirmed to be made deductible soon, although it’s known no details have been determined. Surveying the Chinese social media, the public is concerned how much of the expenses would be deducted from their pre-tax income and in what ways.

China’s cabinet announced in the meeting there will be a period for soliciting public opinion on the plan, which will be put into effect on January 1. It added that both the threshold beyond which personal income will be taxable and the requirements for deductibles will be adjusted with future economic growth.

The income tax cuts are widely reported to be aimed at increasing individuals’ income and their purchasing power.

Chinese authorities announced in July that the job of social security collection would be handed to tax bureaus from next January 1, a move to push more companies to comply with the social security requirement as aging population and rising pension deficit have become knotty problems, say analysts.

Compared with the social security bureau, tax departments are more capable of enforcement due to their salary database. There are concerns that many small and medium-sized companies will be under pressure because they usually would not pay the actual amount for their employees. The China News Service cited some survey data which predicts companies may need to pay nearly two trillion yuan more in 2019. So, many experts and academicians suggest to lower the tax rate to offset the extra burden.

China has rolled out a string of measures to reduce taxes and fees this year as domestic economy slows down and large numbers of exporters face hefty tariffs imposed by the US government in a trade war.

 


Related Stories
Share this page
Touched Sympathetic Bored Angry Amused Sad Happy No comment

China says it will ensure costs for businesses don’t rise due to tax collectionJD.com CEO Liu Qiangdong must appear in court if charged for rape: Hennepin County Attorney's OfficeTrump threatens to expand trade war to all Chinese imports as US moves ahead with further tariffsAsian Games success delights fans, brightens prospects of digital gaming industryChina will counter new US tariffs on $200b Chinese importsJD.com faces US class action lawsuits following rape allegations against CEOChina places limits on after-school tutoring to reduce heavy workload on kidsTariff on Chinese art stymies sellers, museumsJD.com founder, CEO Richard Liu was detained on rape allegation, say US policeBelt, Road aligns with African nations
< Prev Next >