Beijing OKs tax breaks, defers govt-levied charges

China will offer tax concessions for private pension plans that enjoy policy support and are run commercially to meet people's diverse needs, the State Council decided at an executive meeting chaired by Premier Li Keqiang on Monday.

It was noted at the meeting that the development of policy-supported and commercially operated private pensions will provide a useful complement to the basic old-age insurance program and can better meet people's diverse needs and enhance social security safeguards.

Personal income tax concessions, it was decided, will be made available for those participating in policy-supported and commercially operated private pensions: participants will be entitled to a contribution deduction of up to 12,000 yuan ($1,670) per year from their annual taxable income.

No tax will be levied on investment yields for the time being. The actual tax burden for receiving pension benefits will be lowered from the previous 7.5 percent to 3 percent. This policy will be applied retroactively to Jan 1 this year.

"The policy support we introduce this time will deliver sizable benefits. In the process of implementation, we need to gradually fine-tune the policies and sum up experience before applying such policies more broadly," Li said.

A decision was also made at the meeting to temporarily defer payments of certain government-levied charges and deposits to further ease the burden on market entities and help them overcome difficulties.

"Market entities, especially micro, small and medium-sized enterprises, self-employed households and manufacturing firms, now face considerable difficulties. Postponing the collection of government-levied charges and deposits is an important step to support market players. All policies must be delivered on the ground without delay," Li said.

An additional set of fee deferral policies were rolled out for the fourth quarter. Payments of 14 government-levied charges, including farmland reclamation fees and sewage and household waste disposal fees, totaling over 53 billion yuan, will be deferred without overdue fines.

Localities will be encouraged to postpone the collection of subnational, government-levied charges on enterprises, and arbitrary charges will be strictly prohibited.

Payments of deposits that guarantee the quality of projects of various kinds, amounting to about 63 billion yuan, will be deferred. Due responsibilities must be fulfilled and promises delivered with concrete actions to ensure that market entities truly benefit from the policies.

"Relevant institutions and mechanisms of levying charges should be refined to foster a world-class and market-oriented business environment governed by a sound legal framework," Li said.

It was also decided to adopt measures to make more government services interprovincially accessible to further unlock market vitality and bring greater convenience to the people.

On top of the 187 government services already interprovincially accessible, an additional 22 high-demand items affecting a wide range of sectors will be added to the list to address the pressing concerns of households and businesses.

Interagency information sharing will be enhanced and operational standards aligned to make more interprovincial services available online and processed on a one-stop basis. The needs of senior citizens for in-person services will also be well met.