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Changes brought by 2018 Govt Work Report

Updated: Aug 6,2018 2:00 PM

Since the 2018 Government Work Report was delivered at the 13th National People’s Congress in March, favorable changes have been taking place in the development of enterprises.

Business registration

The work report proposed compressing the time needed to establish a company. By the end of 2018, the time will be cut by over half for business registration in major cities such as Tianjin and Shanghai, and by mid-2019, it will be carried out nationwide.

Construction projects

It was decided in the work report that approvals for construction projects should take half the time. In 2018, this will be accomplished in 16 pilot areas, including Beijing, and in 2019, it will be fully implemented nationwide.

Certificates of proof

As planned in the work report, redundant certificates of proof will be canceled for enterprises, especially those without legal basis. This will be completed before the end of 2018.

Value-added tax

The VAT rate for some industries, such as manufacturing and transportation, will be reduced, according to the work report. From May 1, the VAT rate for manufacturing industry was decreased from 17 percent to 16 percent, and for transportation industry it was reduced from 11 percent to 10 percent.

Trademark registration

By the end of 2018, approval times for trademarks will be reduced from the current eight months to six months.

Tax for small firms

As a favorable policy set out in the work report, more small and micro enterprises will be levied less. The annual taxable income threshold for small and micro businesses eligible to cut their income tax in half will be raised, from 500,000 yuan ($73,242) to 1 million yuan, effective from Jan 1, 2018 to Dec 31, 2020.

Foreign investment

A negative list-based approach was put forward in the work report to replace the original approval system in managing foreign investment. On July 28, 2018, a new negative list was put into effect, with the number of items down from 63 to 48, and significant opening-up measures rolled out in 22 fields.

Electricity charges

The government also aims to lower the price of electricity for general industrial and commercial businesses by an average of 10 percent. From April 1, 2018, power charges were reduced by 0.043 yuan per kilowatt-hour, trimming enterprises’ costs by 43 billion yuan. And on May 1, the price was further cut by 0.0216 yuan, involving another 21.6 billion yuan.