Across China: China tax cuts aid rural revitalization

HANGZHOU, March 20 (Xinhua) -- CHINA's large-scale tax and fee reductions unveiled earlier this year are starting to benefit a vast number of villages.

"After the opening of the cross-sea bridge in the Leqing bay, increasingly more and more visitors come to our town, bringing booming business for our agritainment Restaurant," said Ye Yongqian, owner of the Haifengyu farmhouse Restaurant in the city of Yuhuan in east CHINA's Zhejiang Province.

Ye said that during the Lunar New Year holiday, the Restaurant received over 50 tables of guests each day.

The booming business, however, has not led to increased taxes.

"In the fourth quarter of last year, we paid 6,000 yuan (894 U.S. dollars) of taxes on over 200,000 yuan of revenue. Starting this year, we do not need to pay any taxes if the quarterly revenues do not exceed 300,000 yuan," Ye said.

The State Council, or CHINA's cabinet, announced a package of tax and fee cuts in January and Zhejiang became one of the first provinces to cut eight types of taxes and fees for small taxpayers, by the maximum of 50 percent.

Under the tax cuts, small and micro enterprises such as Ye's are also exempt from value-added taxes if their monthly sales are less than 100,000 yuan.

Xu Minjun, deputy director of the Zhejiang provincial tax service, said the latest package of tax and fee reductions were estimated to help save 19.5 billion yuan annually for local small and micro businesses, benefiting over 95 percent of all taxable businesses.

"We earlier thought that factory owners were the only beneficiaries of the tax cuts and never expected that we could also enjoy the policy dividends," said Ye Rongjun, head of the village committee in Huipu village in the city of Taizhou.

The village paid 1.1 million yuan of tax in January and has just received a refund of over 500,000 yuan, which now can be used instead on road renovations and purchases of equipment for the elderly activity center and on computers for agricultural technology.

The tax cuts have also given a boost to the rural hostel business.

The cuts, which raise the monthly taxation threshold from 30,000 yuan to 100,000 yuan in sales, cover over 170 hostels, or nearly 95 percent of all in Danzhu township, Xianju County.

"In February, our sales reached nearly 100,000 yuan. But we do not need to pay taxes and this alone helped us save 3,300 yuan in taxes and fees," said Chen Meiqin, owner of a farmhouse Restaurant in Xianju.

tax cuts also help reduce the burden for other small businesses in the rural areas.

Jiang Pingmei, president of Zhejiang Guanxi Food Co. Ltd., said the company once faced financial pressure as it sought to buy a 1.2-million-yuan instant freezer to ensure supply of fresher Pomelo.

"We saved 96,000 yuan after taxation authorities told us that such a purchase was subject to a preferential one-off deduction of enterprise income tax," Jiang said.