CHINA will implement value-added tax (VAT) credit refund on a large scale to provide strong underpinnings for keeping the operations of market entities stable and maintaining job security, as part of effort to sustain stable macroeconomic performance, the State Council’s Executive Meeting chaired by Premier Li Keqiang decided Monday.

The meeting also decided to adopt holistic approaches to anchor market expectations and maintain steady and healthy development of the capital market.

The meeting noted the arrangements as set out in the Government Work Report to promptly introduce and implement policies to keep economic operation stable in view of the latest developments at home and abroad.

The VAT credit refund this year is worth around 1.5 trillion yuan (US$235.56 billion). This is a relief measure that can support businesses directly and efficiently. It’s also a reform that helps cultivate sources of tax revenue and meaningfully refine the VAT system.

“Under the current circumstances, refunding excess input VAT credits to micro and small businesses and to manufacturing and other key industries is essential for ensuring stable growth at the moment. It is a direct boost to the cash flow of enterprises, and will benefit them more quickly than tax cuts,” Li said.

The meeting decided to refund VAT credits to micro and small enterprises and self-employed households as general VAT payers across all sectors, which is worth around 1 trillion yuan.

Outstanding VAT credits will be refunded in one lump sum by the end of June. Refunds to micro enterprises will be completed in April, and those to small enterprises in May and June. Newly added credits will be fully refunded on a monthly basis starting from April 1.

In addition, tax refund requirement that “newly added credits should be above zero for six consecutive months and newly added credits for the last month should be no less than 500,000 yuan” will be called off on a time-limited basis. (Xinhua)