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Govt revenue loss won't hurt in the long run: Official

By Wang Yanfei | | Updated: 2017-06-13 17:10

Tax cut and cost reduction measures will affect government revenue, but will not become a long-lasting pain, according to China's vice-minister of finance.

"Preferential policies introduced will benefit enterprises, and on the other hand it means revenue lost for the government,"said Shi Yaobin at a press conference on Friday. "The government is able to deal with challenges by avoiding unnecessary spending."

Shi said people shouldn't read too much into the negative side of preferential policies, because in the long run, they will help stimulate enterprises' vitality.

China plans to reduce a total of 1 trillion yuan in costs for enterprises this year.

Shi made the comment after the State Council on Wednesday decided to cut enterprises' spending by reducing costs in the construction industry.

The percentage of deposit that the companies need to pay will be reduced from 5 to 3 percent,according to the State Council.

The money is intended to be used as a guarantee for fixing defects during the first one to two years after a construction project begins, and a 2 percentage point cut means less burden for enterprises, according to Li Rusheng, a senior official with the Ministry of Housing and Urban-Rural Development.

The measure will help reduce that burden by a total of 210 billion yuan each year, according to Li.

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