China to improve tax-cut policies

Updated: 2011-12-26 14:40


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BEIJING - China will further its efforts to make adjustments in tax reduction policies next year in a bid to improve people's livelihood, China's Minister of Finance Xie Xuren said at an ongoing work conference.

While laying out the roadmap for next year's tax-cut policies, Xie said the ministry will focus more on reforms in the taxation system in 2012 to build up a mechanism that is conducive to the country's economic restructuring.

The measures will include lowering tariffs to encourage imports of energy, resources, high-tech equipment and key components, Xie said.

According to a statement by the Ministry of Finance (MOF) earlier this month, the average tariff on more than 730 kinds of imported goods will be lowered to 4.4 percent as of January 1, 2012.

Another reduction policy to go into effect next year states that the corporate income tax base by micro-and-small-sized enterprises will be halved while the tax rate will remain 20 percent, as part of the country's efforts to ease their financial strains, Xie said.

He stressed that the ministry will clear up unreasonable and illegal tax items to ease burdens on businesses and communities, adding that it is also mulling policy adjustments in some other categories next year, including resources tax, consumption tax and property tax.

Meanwhile, Xie said that in 2012 the ministry will work to better its role in income distribution management, increase the income of vulnerable groups and gradually lift the share of personal income in the distribution of national income.

To support domestic consumption and narrow the wealth gap, China has raised the threshold at which individuals must pay income taxes from 2,000 yuan ($316) to 3,500 yuan on September 1, which has saved citizens more than 60 billion yuan since its implementation, according to a report by the People's Daily last week.