China to cut enterprise contributions to social insurance from May 1

BEIJING - Starting from May 1, China will lower enterprise contributions to urban workers' basic aged-care insurance from 20 percent to 16 percent to reduce enterprises' burdens, Minister of Finance Liu Kun said Sunday.

The country will strengthen efforts on cutting tax burdens and reducing social insurance contributions of enterprises, with the total reduction expected to reach nearly 2 trillion yuan (about $298 billion) this year, Liu said at the China Development Forum (CDF) 2019.

The current policy of reducing premiums for unemployment insurance and work injury compensation insurance will continue, with higher subsidies to support labor-intensive enterprises' employment and social insurance payments, said the minister.

"We will introduce both general-benefit and structural tax cuts, focusing primarily on reducing tax burdens on the manufacturing sector and on small and micro businesses," Li said.

Reform of China's value-added tax (VAT) will start from April 1, cutting the VAT rate for sectors including manufacturing from 16 percent to 13 percent.

Liu also said nearly 18 million small and micro enterprises benefited from the tax cuts implemented in January, accounting for more than 95 percent of the total number of taxpaying enterprises.

Scheduled from Saturday to Monday, the CDF is the first high-level international conference held in Beijing right after the annual sessions of the national legislature and political advisory body.