China announced on Wednesday that it will continue to ease up on tax burdens for individuals through improved implementation of the special individual tax deduction mechanism in the country.
According to Xinhua, 250 million taxpayers received reduced tax grants by over 440 billion yuan during the first nine months of 2019. The amount accounts for $62.5 billion and is a significant milestone in the government's efforts to help reduce the financial burdens of taxpayers.
During Wednesday's State Council executive meeting, Chinese Premier Li Keqiang said the committee decided to further ease up on taxes for both low-income and medium-income groups in the community.
As part of Beijing's commitment to helping taxpayers, individuals who generate an annual income not higher than 120,000 yuan within 24 months will be exempted from declaring their settlements for their taxes.
Aside from easing tax burdens, the committee also discussed how to develop a more stable supply of medicines created by high-quality manufacturers. To help implement a better-centralized system for distributing medicines, reporting systems will be developed for emergency stocking.
A draft law was also established during the meeting wherein the issue for construction taxes and urban maintenance are among the key factors for deliberation. China's Standing Committee of the National People's Congress is set to discuss the said matters.
Late last month, deputy director for the department for tax cuts at the State Taxation Administration, Cai Zili, revealed that the Chinese government also reduced business tax burdens by 703.5 billion yuan during the first three quarters of 2019.
According to Caixin Global, Cai also revealed that Beijing cut major corporate fees reaching 272.5 billion yuan through VAT reforms. Business segments that benefited largely from the reductions are wholesale and retail segments as well as manufacturing sectors.
Before the latest tax cuts were implemented for the first three quarters of the year, Beijing previously confirmed that it will cut taxes and business fees of up to 2 trillion yuan for the entire year.
The purpose of cutting taxes for both businesses and individual taxpayers is to help boost domestic demand as the economy slows down and global headwinds start affecting demand among consumers.
As a whole, the country slashed over 1.5 trillion yuan during the said quarters in individual income tax and VAT reductions combined. The numbers are a significant show of the Chinese government's efforts in implementing tax reduction reforms that will help alleviate the burdens of citizens.
The tax cuts and business VAT reductions are also expected to help promote savings among individual taxpayers who are still struggling with future investments.
