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Tax cuts suggested to help boost salaries

2010-06-02 15:02

Tax cuts may be proposed to be applied in certain highly competitive industries to help bring employee wages up, the First Financial Daily reported on Wednesday.

The scope of tax cuts covers corporate income tax, value added tax, and turnover tax, said Wu Xiaoling, vice-chairman of the Financial and Economic Affairs Committee of China's top legislature, National People's Congress (NPC).

An income distribution research conducted in May by the committee implies that industries facing fierce market competition earn less profit than monopoly ones. However, these are usually labor-intensive ones that pay employees less.

Cutting taxes will ease companies' financial burden, allowing them to raise employee salaries.

"We will propose this plan, but the final research paper has yet to be handed over," Wu added.

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