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Govt to reduce VAT rates, lower insurance fees, Li says

By Chen Jia | chinadaily.com.cn | Updated: 2019-03-15 12:54
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Tax and fee cuts will be nearly 2 trillion yuan this year, a key measure to cope with current economic downward pressure. [Photo/VCG]

China will cut the value-added tax rates April 1 and lower the social insurance fees from May 1, said Premier Li Keqiang on Friday.

Tax and fee cuts will be nearly 2 trillion yuan ($297.5 billion) this year, a key measure to cope with current economic downward pressure, said Li at a news conference at the conclusion of the annual two sessions.

The VAT rate for manufacturing companies will be cut to 13 percent from 16 percent, and that for the transport and construction sectors will be reduced to 9 percent from 10 percent. For the social insurance fees, the premium rate will be decreased from 20 percent to 16 percent, according to the Premier.

China will also inclusively reduce taxes for the medium and small-sized enterprises, ensuring that taxes on all industries will be lowered, stressed Li.

He said the tax and fee cut means government's income will fall, but the growth of fiscal spending will be in line with the GDP growth this year, especially to ensure spending on key areas such as people's livelihood.

The government will tighten general budgeted spending, and ask some financial institutions and State-owned enterprises to turn over more profits to the national treasury, said Li.

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