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Taxation

China's Tax Cuts Boost Scientific and Technological Innovation, Manufacturing Industry

Strategic Insights

— 1 min read

China's State Administration of Taxation has reported significant tax cuts and reductions in fees and refunds to support technological innovation and manufacturing development. From January to May, the main policies to support these industries reduced taxes, fees and refunds amounting to 636.1 billion yuan. The tax reductions and fees are mainly used to support high-tech enterprises, emerging industries, and advanced manufacturing enterprises.

Key Takeaways:

  • The State Administration of Taxation has cumulatively reduced taxes, fees and refunds of 636.1 billion yuan as of the end of May.
  • Tax reductions, fees and refunds are mainly used to support high-tech enterprises, emerging industries, and advanced manufacturing enterprises.
  • The policies that support the cultivation and development of high-tech enterprises and emerging industries reduced taxes by 140.7 billion yuan.
  • The policies that support the high-quality development of the manufacturing industry, such as the additional deduction of value-added tax for advanced manufacturing enterprises, reduced taxes, fees and refunds by 415.8 billion yuan.
  • The structural tax and fee reduction policies have driven China's scientific and technological innovation and high-quality development of the manufacturing industry.
  • VAT invoice data show that in the first five months of the year, the sales revenue of high-tech industries increased by 14.2% year-on-year, significantly faster than the national overall growth rate.
  • The core industries of the digital economy increased by 10% year-on-year, and the amount of digital technology purchased by enterprises nationwide increased by 9.7% year-on-year.

Statistics:

  • Tax reductions, fees and refunds: 636.1 billion yuan
  • Reduction in corporate income tax for high-tech enterprises: 140.7 billion yuan
  • Additional deduction of value-added tax for advanced manufacturing enterprises: 415.8 billion yuan
  • Sales revenue of high-tech industries: Up 14.2% year-on-year
  • Sales revenue of advanced manufacturing industries: Up 21.6% and 19.4% year-on-year
  • Digital technology purchased by enterprises nationwide: Up 9.7% year-on-year

Sources:

  • State Administration of Taxation, Republic of China
  • VAT invoice data

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