Tax cuts boost Guangdong's economy

The Guangdong Provincial Tax Service under the State Taxation Administration introduced the implementation of tax cuts and fee reductions in the province from January to April this year at a press conference of the provincial government recently.

Guangdong has added a tax reduction of 67.27 billion yuan ($9.74 billion) in the first four months this year, said Chen Zhongming, deputy director of the Guangdong Provincial Tax Service.

A series of policies have been applied to the province, including furthering the reform in value-added tax, tax cut policy of small and micro enterprises and reform of individual income tax.

Bonus from Guangdong tax reform has gradually turned into the dynamics of economic structure optimization and effective needs expansion according to the statistics.

Chen introduced that tax cuts and fee reductions is using the reduction of government revenue in exchange for the increase of corporate benefits and the multiplication of market vitality.

The policy package this time has unprecedented tax reduction measures, inclusive policies for small and micro enterprises and individual tax reform that benefits each person. It will further accumulate energy for economic development.

The policy package will give strong supports to entity economy and private enterprise development. The entity economy and productive services will benefit the most among other industries, while private enterprises and individual business are the main beneficiaries.

The value added of private industrial enterprises above designated size from January to April increased 8.6 percent compared with the same period of last year.

"The SMEs are the main force to entrepreneurship, innovation and help maintain employment stability", said Chen, and that "statistics from January to April show that the tax policy has significantly reduced its tax burden". In the first four months, SMEs of Guangdong have a total tax reduction of 6.58 billion yuan.

The tax reduction of individual income is 32.44 billion yuan in the first quarter in 2019. Once the tax burden has been released, enterprises would increase investment in industrial upgrading and technology research, largely driving entrepreneurship and innovation. The investment in Guangdong's industrial technology improvement has grown by 11 percent in the first quarter.

Meanwhile, the bonus of tax reduction will be shared by producers, sales enterprises and customers via price transmission mechanism and market system. From January to April, the retail and catering sales increased by 6.5 percent and 8.4 percent respectively in Guangdong.

Guangdong government will raise funds in multiple ways to make up for the tax reduction, reduce general expenditure, ensure expenditure in key areas, enforce budget execution constraints, put forward the reform of budget preparation, implementation, supervision and management, adopt departmental budget executive responsibility, and strengthen the supervision and analysis of fiscal operation.

Chen said that tax departments in Guangdong will carry out six measures that include building a unified command system, detailing key tasks, promoting the implementation of reform tasks, and making a clear classification of more than 300 effective tax preferential policies in use.