ZCZC
BCN-25
CHINA-BOND-TAX-POLICY
China’s more proactive fiscal policy to support economy
BEIJING, July 27 (Xinhua) — The Chinese government has announced a raft of
fiscal measures including more tax breaks and faster bond issuance to ensure
stable economic development this year.
A more proactive fiscal policy will be pursued, according to an executive
meeting of the State Council, China’s cabinet, earlier this week.
Based on economic development goals defined by the central economic work
conference and the government work report, China earmarked 20.98 trillion
yuan (3.09 trillion U.S. dollars) for public expenditures in 2018, up 7.6
percent year on year. The fiscal deficit is expected to remain flat at 2.38
trillion yuan, and local government special bonds were set at 1.35 trillion
yuan this year, up from 800 billion yuan in 2017.
Liu Wei, vice minister of finance, said at a press conference Thursday that
the government, rather than using a strong stimulus, will focus on tax
reductions and bring down business burdens when strengthening the policy
support for the economy.
The following fiscal measures will be put in place before the end of 2018:
— There will be a 65-billion-yuan tax cut to encourage businesses to spend
more on R&D. The policy, currently applicable to small- and medium-sized tech
firms, will cover all businesses by 2020.
— Some companies in advanced manufacturing, the modern tertiary sector,
and power grids will be refunded 113 billion yuan of value-added tax by the
end of September.
— Preparations will be sped up to launch a national financing guaranty
fund to tackle financing difficulties of small firms. The investment in the
first phase will be no less than 60 billion yuan. It will ensure 140 billion
yuan of loans for about 150,000 small and micro firms each year.
— Local governments will be allowed to issue 1.35 trillion yuan of special
bonds at a faster pace, which will add more tangible progress on capital-
hungry infrastructure projects.
— The Ministry of Finance will allocate funds to help people set up
businesses, facilitate the development of startups, and make favorable
policies more available for small and micro companies.
To make the proactive fiscal policy more vigorous, the government will
fine-tune its measures in accordance with the changing circumstances, and
step up efforts in implementation, Liu said.
BSS/XINHUA/HR/1450