CHINA will reduce the tax burdens and social insurance contributions of enterprises by nearly 2 trillion yuan (US$298 billion) this year, according to a government work report delivered by Premier Li Keqiang at the opening meeting of the annual legislative session in Beijing yesterday.

“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.

China will reduce the current value-added tax rate of 16 percent for manufacturing and other industries to 13 percent, and lower the rate for such industries as transportation and construction from 10 percent to 9 percent.

Supporting measures, like increased tax deductions for producer and consumer services, will be taken to make sure that tax burdens in all industries do not go up, according to the premier.

“We will ensure that the general-benefit tax cut policies issued at the start of the year for small and micro businesses are put into effect,” Li said.

The country will lower the share borne by employers for urban workers’ basic aged-care insurance, and localities may cut contributions down to 16 percent, he said.

China must not only reduce burdens on enterprises, but also ensure that employees’ social security benefits remain unchanged and aged-care pensions increase as appropriate and are paid on time and in full, so that social security funds are sustainable and both enterprises and employees benefit.

In 2018, the tax and fee burdens on enterprises and individuals were reduced by around 1.3 trillion yuan, according to the report.

Meanwhile, China has set its GDP growth target at 6-6.5 percent for 2019, according to the premier.

China aims to maintain the consumer inflation level at around 3 percent and create over 11 million new urban jobs. The surveyed urban unemployment rate is projected to stay at around 5.5 percent and the registered urban unemployment rate within 4.5 percent.

China’s economy outperformed the official 2018 goal of “around 6.5 percent” by expanding 6.6 percent. A range target was also set for 2016 at 6.5-7 percent.

This year is the 70th anniversary of the founding of the People’s Republic of China. It will be a crucial year for China as it endeavors to achieve the first centenary goal of building a moderately prosperous society in all respects, Li said.

“China is still in an important period of strategic opportunity for development,” he said. “We have the unshakable will and the ability needed to prevail over difficulties and challenges of any kind.”

(Xinhua)

(Special report on the government work report on P2)