The amount of corporate tax and fee cuts in Shenzhen in the first five months this year surpassed 49.8 billion yuan (US$7.24 billion), which has been a remarkable benefit to local enterprises.
The figure was released at a press conference jointly held by the city’s taxation and social insurance bureaus and the steering office for business environment improvement Wednesday.
Wholesale and retail businesses and manufacturing are the biggest beneficiaries of the tax cuts, as per the conference.
Guo Yuehua, deputy director of the local development and reform commission, said at the press conference that Shenzhen has been pushing ahead with reforms that aim to optimize the city’s business environment and have achieved notable results.
A work memo on optimizing the city’s business environment was released at the conference. The document provides a comprehensive summary on the reform measures the city has adopted and the effects that have been achieved in recent years.
According to Cao Xudong with the city’s taxation bureau, the bureau has streamlined the procedure for paying taxes and adopted technologies like big data, cloud service and artificial intelligence to facilitate online services.
He added that the bureau has also combined blockchain technology and intelligent algorithms with modern logistics technology to make invoice management smarter.
Shenzhen rolled out a slew of new measures to support the development of the private economy last December, including a 100-billion-yuan tax reduction for private enterprises.
By the end of last October, the number of business entities in the city had reached 3.07 million, an increase of 3.2 percent over the previous year.
The private sector plays an important role in the Chinese economy, contributing more than 50 percent of tax revenue, 60 percent of GDP, 70 percent of technological innovation, 80 percent of urban employment and 90 percent of new jobs.
In February last year, Shenzhen announced 20 reform measures encompassing 126 policies to improve its business investment and market environment.
The measures and policies, tailored for Shenzhen and referring to the experiences of advanced countries and regions like Singapore and Hong Kong as well as the World Bank’s business environment evaluation system.
The move aimed to create a world-class business environment in government service, management standardization, market vitality and comprehensive costs in the city, according to the report.
In the latest move announced in May, the city is set to slash the salary tax from 45 percent to 15 percent for top overseas and local talent to maintain its tech edge and encourage innovation. According to Shenzhen Vice Mayor Wang Lixin, the city will use its own operating income to make up for the shortfall in tax revenue. Under the scheme, annual income tax will be cut to 15 percent for certain individuals.(Liu Wenjin)