News & Policies
Governments Arrange 2019 Key Work on Cost Reduction
Four governmental departments, as the National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Finance and The People’s Bank of China have recently issued the Circular on Working Effectively on Key Aspects of Cost Reduction in 2019 (the "Circular").
The Circular calls for efforts to:
1. Move forward with large-scale tax and fee cuts;
• The value-added tax (VAT) rates will be reduced, urging practically effective actions to carry out the policy that cut the VAT rate from 16% to 13% for such industries as the manufacturing and from 10% to 9% for sectors including the transportation and the construction sector, so as to ensure tax levies in all sectors will be lowered without any rise.
• A small-scale taxpayer that carries out sales acts subject to value-added tax (VAT) with total monthly sales amounting to CNY100,000 or below shall be exempted from VAT.
2. Show stronger financial support for the real economy;
• The Circular calls for expanding the scale of direct financing, adding that active support will be given to qualified enterprises to seek direct financing of larger amount.
• The bond financing support tool will be effectively offered to private enterprises, and the equity financing support tool will be launched in due time.
3. Constantly reduce institutional costs of transactions;
• The implementation of the negative list (for Year 2019) for market access will be pressed ahead in all aspects.
4. Significantly ease the burden of social insurance contributions on enterprises;
• From May 2019, the old pension can be reduced to 16% in those province which rate is higher than 16%.
5. Continue to lower costs of energy consumption and of land use;
6. Promote cost reduction and efficiency improvement in the logistics sector;
7. Improve the efficiency of capital turnover;
8. Support enterprises in tapping their potential.
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