Reducing tax burden on enterprises has given obvious boost to economy

THE VALUE ADDED TAX for manufacturing was lowered from 17 to 16 percent on Tuesday, while the rate for transportation, construction, basic telecommunication services and farm produce was reduced from 11 to 10 percent. The government also unified the standard for small-scale taxpayers and returned the withholdings of value added tax of some industries. Beijing News commented on Wednesday:

The tax cuts have generated immediate effects. The price of gasoline and diesel dropped by 75 yuan ($12) per ton and 65 yuan per ton respectively, and the prices of some automobiles dropped by tens of thousands of yuan.

The tax cuts will amount to 400 billion yuan ($64 billion) this year. This will not only directly benefit enterprises, it will also have a chain reaction that will boost consumption growth.