Tax reduction gives stimulus to China's high-tech hub

Integrated circuit and software enterprises in South China's tech hub Shenzhen, Guangdong province, enjoyed a total of 4.2 billion yuan (about $605 million) in tax concessions in the first half of the year, according to the Shenzhen branch of the State Taxation Administration (STA).

Cao Mingjun, director of the enterprise income tax department of the STA Shenzhen branch, said the government has ramped up tax and fee reductions to help the firms tide over difficulties and continue to seek high-quality development.

"During this special period where confidence is more precious than gold, the government's support is incredibly important to us. With the help of these new policies, we are sure to enjoy better and better development," said Li Chuangfeng, chairman of Shenzhen TIGO Semiconductor Co Ltd.

The company's main products are memory chips and storage modules. From 2017 to 2019, the company enjoyed 42.43 million yuan in tax concessions.

Li said with the incentive, the company will increase its investment over the next three years.

Revenue from Shenzhen's software and information technology service industry reached more than 1.45 trillion yuan in 2019, of which 733.7 billion yuan was generated by the software sector, which ranked second in the country in terms of industrial scale.

In 2019, 407 integrated circuit and software enterprises in Shenzhen together enjoyed tax relief worth 10.9 billion yuan, up 25 percent year-on-year.