NPC deputy talks China's fee and tax cuts

CHINA has conducted tax cuts on a large scale to ease the burden of small- and micro-sized enterprises and individuals. tax cut has also been a hotly debated issue at CHINA's largest political event of the year, a meeting of legislative delegates and political advisers known as the "Two Sessions".

CGTN talked to numerous deputies to the National People's Congress (NPC) and taxpayers on the implementation of the latest income tax law and related policies to keep you up to date on tax cuts at the Two Sessions.

Massive tax cuts for enterprises will bring substantial benefits

The massive tax cuts promised in the government's work report have stirred up lively debates among NPC deputies.Deputies from East CHINA'sShandong Province shared their views on optimizing the business environment and promoting high-quality development of the private economy.

Shandong Province is well-known for its Confucian culture. In the economic field, it has invested heavily in industrial and manufacturing sectors.

The 2019 tax cut plan, which is more aggressive than that of last year, will focus on lowering value-added tax (VAT) rates.

The government will reduce the current rate of 16 percent in manufacturing and other industries to 13 percent, and lower rates in transportation, construction, and other industries from 10 to nine percent.

For Shandong Province, the 3 percent deduction in the VAT will reduce its burden by about 30 billion yuan (about 4.47 billion U.S. dollars), according to NPC Deputy Qin Yufeng.

01:57

Deputy Zheng Yueming runs a high-tech manufacturing company, and was not expecting such a huge tax cut plan.

Zheng had calculated how much money he could save and was surprised to see the actual number. "I was so excited after hearing the report," he said. "I called my accountants immediately and they told me that we could save 50 million yuan (about 7.45 million U.S. dollars) thanks to the tax deduction."

Zheng said the money saved will be put into technology innovation, and he is looking forward to more top-level designs and policies for private enterprises on market access.

CHINA's individual income tax reforms

As a key part of CHINA's fiscal stimulus, the country has carried out the new individual income tax law starting this year. In the first three months, some 100 billion yuan or nearly 15 billion U.S. dollars worth of income taxes have been slashed.

Basically, the fresh income tax cuts include three major changes - the minimum taxable income has been raised to 5,000 yuan, the tax rates have been readapted, and the country has introduced the itemized deductions for the first time ever.

The items eligible for deductions cover six key aspects of everyday life, including expenses for children's education, continuing education, healthcare for serious illnesses, housing loans, housing rent and support for the elderly.Authorities say more than 70 million people no longer need to pay income taxes.

For accounting professor Lu Xin, this is her seventh year serving as an NPC deputy. She has been witnessing the second largest economy's tax reforms over the years.

For accounting professor Lu Xin, this is the seventh year serving as an NPC deputy. She has been witnessing tax reforms over the years. /CGTN Photo

"The latest reform is tremendous and it's gradually approaching the international common practices. This is an important first step, as we have gradually built up the framework of the country's personal income taxation model," said Lu.

"This year, I am raising a motion on one of the six deduction items. I think we also need to take taxpayers' spouses into account when it comes to thesupport for the elderly, and this could also be applied to the care for children. That's why I suggest we should gradually shift our income taxation from individual-based units to household-based," added Lu.

This is the seventh amendment of CHINA's individual income tax law and it is said to be the largest-scale tax reform in more than two decades.