BEIJING – China will exempt the 3% Value Added Tax (VAT) levied on some small firms, the country’s main source of jobs, the finance ministry said on Thursday, to help shore up the world’s second-largest economy.
The exemption will take effect from April 1 to Dec. 31, the ministry said.
The measure was part of a slew of policies aimed at supporting small firms and easing their financial burdens amid recent COVID-19 outbreaks and a slowing economy.
To shore up economic stability, China has pledged around 1.5 trillion yuan ($235.47 billion) of VAT rebates to cushion the financial pressure on small firms.
Xu Hongcai, vice minister of finance, told a press conference on Wednesday that all small firms can claim 100% VAT rebates this year compared with 60% previously.
In addition, a total of 1.2 trillion yuan of special transfer payments by the central government to regional governments have been arranged to support tax rebates and employment, the ministry said.
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The first batch of special transfer payments of 400 billion yuan were issued on Monday.
($1 = 6.3702 Chinese yuan renminbi)
(Reporting by Beijing newsroom; Editing by Alex Richardson & Simon Cameron-Moore)