China cuts 1.1 trln yuan of taxes, fees in 2021

BEIJING, Jan. 26 (Xinhua) -- China cut about 1.1 trillion yuan (about 173.9 billion U.S. dollars) of taxes and fees in 2021 amid the country's efforts to bolster economic growth and strengthen market vitality, the top tax authority said on Wednesday.

Last year, the country rolled out a slew of preferential policies on deducting and deferring taxes and fees to shore up the industrial economy and support micro, small and medium-sized enterprises, Wang Daoshu, deputy head of the State Taxation Administration, told a press conference.

A total of 216.2 billion yuan of tax payments were deferred for micro, small and medium-sized enterprises in the manufacturing sector last year, Wang said.

He added that enterprises in the coal, power and heating industries saw 27.1 billion yuan in tax cuts, rebates and deferrals.

China's tax income, excluding export tax rebates, stood at 15.46 trillion yuan and achieved the government's annual target, Wang noted.

Tax income accounted for 15.1 percent of the country's gross domestic product in 2021, edging down 0.1 percentage points and 3 percentage points from that of 2020 and 2015, respectively, indicating that tax burdens on market entities were further eased, Wang said.

In 2021, China has given full play to the role of taxation in making cross-cycle and counter-cycle adjustments while focusing on sustaining smaller businesses, technological innovation and the real economy, said Cai Zili, an official with the administration.

Thanks to the implementation of preferential measures, China's small and micro firms saw tax cuts increase by 295.1 billion yuan last year, and their taxes per 100 yuan of sales revenue dipped by 12.4 percent year on year, official data showed.

"Market vitality has been further boosted," Wang said, citing that the country saw 13.26 million firms that were newly set up in 2021 and have engaged in tax-related activities, up 15.9 percent year on year.

Meanwhile, enterprises have gained improved innovation impetus due to declining spending on research and development, Cai said.

Research and development expenditure by the country's key tax source firms in the manufacturing sector increased by 22.6 percent from a year ago.

Tax payment services have been further facilitated in the country, as 90 percent of tax payment services and 99 percent of tax filing services are accessible online, according to the administration.

The country will introduce more measures on tax and fee cuts this year while giving priority to micro, small and medium-sized enterprises, individual businesses and the manufacturing industry, Cai added.

China's fiscal revenue rose 10.7 percent year on year to hit 20.25 trillion yuan in 2021, nearly doubling from the 2012 figure of 11.73 trillion yuan, official data showed.

Stronger measures will be taken to cut fees and taxes to support market entities this year with a combination of fiscal incentives, said Xu Hongcai, vice minister of finance.

The measures will be more precise and sustainable to meet the needs of market entities, he said.