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China to introduce policies to lessen burden on businesses and individuals

Zhang Yue
Updated: Apr 3,2019 9:27 PM

China will take measures to reduce government-levied charges and operating service charges in order to further lessen the burden on businesses and individuals. The personal postal articles tax rates will also be lowered to expand imports and boost consumption, the State Council executive meeting chaired by Premier Li Keqiang decided on April 3.

General Secretary Xi Jinping stressed at the Central Economic Work Conference that it is crucial to effectively reduce the burden on companies, make electric power transactions more market-based, and cut electricity and logistics costs. Premier Li Keqiang pledged in the Government Work Report this year to take reform measures to lower business-related charges. Electricity costs in manufacturing will be reduced, and the average utility rates for general industrial and commercial businesses will be cut by another 10 percent. A number of railway and port charges will be abolished or reduced. Average broadband service rates for small and medium-sized enterprises will be cut by another 15 percent, and the average rates for mobile internet services, by more than 20 percent.

It was decided at the meeting that starting from July 1, charges on real estate registration will be cut or canceled. The coverage of patent applications and annual fee reductions will be expanded.

Charges on exit and entry travel documents such as private passports, registration of certain trademarks, and radio frequency uses in electricity and the Internet of Vehicles will be further reduced. Significant reductions in these charges are part of the plan. For example, ownership registration fees for real estate such as garage and parking spots will be reduced from 550 yuan to 80 yuan each. And the registration fee for continued use of trademarks will go down from 1,000 yuan to 500 yuan.

Payments by airline companies to the civil aviation development fund and national major water conservancy construction fund will be halved. Charges for national cultural programs faced by centrally administrated enterprises and institutions will be cut by half, effective until the end of 2024.

It was also decided at the meeting that mobile internet service rates and broadband service rates for small and medium-sized enterprises will be reduced by about 180 billion yuan in 2019; average electricity rates for general industrial and commercial businesses will be trimmed; prices for rail freight transport will be lowered; port charges will be cut or merged, and the charge for citizens’ ID information certification will be revoked.

The measures identified at the meeting are the most recent moves for fee reduction following the lowering of the social insurance contribution rate. Full delivery of these measures is expected to lighten the fee burden on companies and individuals by more than 300 billion yuan in 2019.

“Tax and fee cuts are a key measure to tackle the downward economic pressure this year. They are a major policy initiative. Cutting fees could serve multiple purposes. All government departments must do their best to effectively ease the burden on businesses and deliver real benefits to consumers,” Premier Li said. “This will also boost our industrial development.”

The meeting also worked out measures for cutting personal postal articles tax rates. Starting from April 9, the tax rate on food and medicine will be cut from 15 percent to 13 percent, and the tax rate on textiles and electrical appliances will be trimmed from 25 percent to 20 percent.