Tax Cuts And Reductions Are The Top Priority Of Active Fiscal Policy

- Mar 12, 2019-

On March 7, the press conference of the Second Session of the 13th National People's Congress held a press conference, and Minister of Finance Liu Kun talked about the hot issues of finance and taxation.

Tax reduction and fee reduction


Tax reduction and fee reduction are the top priority of this year's active fiscal policy. They are major measures to reduce the burden on enterprises and stimulate the vitality of the market. They are major measures for macroeconomic policies to support steady growth, ensure employment, and adjust the structure.


Financial revenue and expenditure


The financial department should be an "iron cock", but also a good "iron abacus", spend the money spent, and spend it on the blade. Increase investment in key areas and key links while strictly controlling general expenditures


Deficit scale


Appropriately increase the fiscal deficit rate, on the one hand, strengthen the counter-cyclical adjustment, and promote the steady and rapid development of the economy; on the other hand, it will also be compatible with the larger tax reduction and fee reduction, effectively reducing the burden on enterprises, and stimulating the vitality of market players.


Poverty alleviation funds


This year, we plan to allocate a total of 126.1 billion yuan of special poverty alleviation funds, and adjust and optimize the investment of poverty alleviation funds in the industry, and further strengthen the investment guarantee for compulsory education, basic medical care, housing safety and drinking water safety in poverty-stricken areas.


On March 7, the press conference of the Second Session of the 13th National People's Congress held a press conference. Minister of Finance Liu Kun, Vice Ministers Cheng Lihua and Liu Wei answered questions from Chinese and foreign journalists on hot issues such as tax reduction and fee reduction and deficit rate.


VAT is the core content of tax reduction and fee reduction


Last year, the scale of tax reduction and reduction in China was about 1.3 trillion yuan. This year's government work report proposes that the burden of corporate tax and social security contributions will be reduced by nearly 2 trillion yuan throughout the year. What aspects will this year's tax cuts and fees be reduced? What is the "main dish" in this?


"Deduction of taxes and fees is the top priority of this year's active fiscal policy. It is a major measure to alleviate the burden on enterprises and stimulate the vitality of the market. It is a major measure for macroeconomic policies to support steady growth, job security, and structural adjustment. It has the effect of gaining more." Liu Kun stressed.


In terms of tax reduction, this year, in addition to the implementation of the inclusive tax relief for small and micro enterprises at the beginning of the year, and the full implementation of the revised personal income tax law, the VAT reform will be further deepened.


Liu Kun said that deepening the VAT reform is the core content of this year's tax reduction and reduction, which is also the "main dish." Focusing on the promotion of inclusiveness, the current 16% tax rate for manufacturing and other enterprises will be reduced to 13%, and the current 10% tax rate for transportation, construction and other industries will be reduced to 9%, ensuring a significant reduction in tax burdens in major industries. Although the tax rate of 6% is kept unchanged, a series of supporting measures are adopted to ensure that the tax burden of all industries is only reduced.


In terms of fee reduction, the burden of corporate social security contributions is significantly reduced, and the proportion of urban employees' basic endowment insurance units is reduced, which can be reduced to 16%. Continue to implement the phased reduction of unemployment and work injury insurance rate policy, and increase the stability of social security and social security subsidies for labor-intensive enterprises. Accelerate the provincial-level overall reform of endowment insurance, continue to improve the central adjustment ratio of enterprise employee endowment insurance funds, and transfer some state-owned capital to enrich social security funds.


Be brave as an "iron cock" and play "iron abacus"


Affected by factors such as increased downward pressure on the economy and the implementation of larger tax cuts and fee reductions, it is expected that fiscal revenue growth will slow down in 2019. Under the situation that the contradiction between fiscal revenue and expenditure is relatively prominent, how to optimize the expenditure structure and guarantee key areas?


"This year's fiscal balance will be more stressful, and the balance is indeed very difficult." Liu Kun said that the financial department should be an "iron cock", the money that should not be spent "doing nothing", but also to lay the "iron abacus", the flower The money is spent well, and it is spent on the blade. While strictly controlling general expenditures, increase investment in key areas and key links.


"Support to deepen the structural reform of the supply side, make good use of the special awards for industrial enterprise structure adjustment, and consolidate the results of 'three to one, one drop and one make up'. Comprehensive use of government investment funds, risk compensation, post-subsidy and other means to guide enterprises to increase technology Investing, upgrading the level of the industrial chain, supporting the strengthening of the financial system to serve the real economy, and promoting the formation of a virtuous circle of financial and real economy." Liu Kun said.


2.8% deficit rate is positive and secure


According to the government work report, the deficit rate is scheduled to be 2.8% this year, 0.2 percentage points higher than last year's budget; the fiscal deficit is 2.76 trillion yuan. "Properly raising the fiscal deficit rate is a major decision-making arrangement made by the Party Central Committee and the State Council to comprehensively consider the needs of economic and social development and fiscal sustainable development. On the one hand, it strengthens counter-cyclical adjustment and promotes stable and rapid economic development; on the other hand, it also Large-scale tax cuts and fee reductions, effectively reducing the burden on enterprises, and stimulating the vitality of market players." Liu Kun said.


Is it 0.2% higher than the increase? Liu Kun said that in addition to appropriately increasing the deficit rate, the central government has also increased the profits of certain state-owned financial institutions and central enterprises, and local finance will also revitalize various funds and assets through multiple channels. "This aspect also raises some funds, which allows us not to use To increase the deficit rate too high. Therefore, this year’s deficit arrangement is positive and stable."


"China's deficit has ranged from 2.18 trillion yuan in 2016 to 2.38 trillion yuan in 2017 and 2018, to 2.76 trillion yuan this year. The scale has continued to increase. This year, it has increased by 380 billion yuan over last year. It reflects the requirements of the active fiscal policy 'to improve efficiency'." Liu Kun said.


Liu Kun stressed that from the perspective of the deficit rate, it is 2.9% in 2016 and 2017, 2.6% in 2018, and 2.8% this year. It is always controlled within the international 3% control line, compared with the world's major economies. China's deficit rate is not high. This arrangement takes into account factors such as fiscal revenue and expenditure and special bonds, and also leaves room for policy control in the future.


Full support for poverty alleviation


"This year, the Ministry of Finance will continue to put the fight against poverty in a prominent position and fully support the fight against poverty and the decisive battle to win." Cheng Lihua said.


It is reported that this year, it plans to arrange special poverty alleviation funds of 126.1 billion yuan, an increase of 18.9% over the same period of last year. This is an increase of 20 billion yuan for four consecutive years. At the same time, adjust and optimize the investment in poverty alleviation funds in the industry, and further strengthen the investment guarantee for compulsory education, basic medical care, housing safety and drinking water safety in poverty-stricken areas.


According to Cheng Lihua, the poverty alleviation funds are further inclined to the “three districts and three states” and other deep poverty-stricken areas with high poverty, high poverty rate and poverty alleviation. The allocation of other related transfer payments and debt limits also continues to the poor areas, especially Deep poverty areas are tilted.


"Accelerate the construction of a dynamic monitoring mechanism for poverty alleviation funds, real-time dynamic monitoring of all types of poverty alleviation funds at all levels, implementation of performance management of poverty alleviation project funds, and better play the role of financial investment in poverty alleviation." Cheng Lihua said.


In some places, there have been false reports, misappropriation and misappropriation of poverty alleviation funds. How to take measures to prevent them? Cheng Lihua said that while constantly improving the system and mechanism, it will focus on two measures: on the one hand, it is necessary to fully disclose the results of the distribution of poverty alleviation funds in provinces, cities and counties, and the arrangements for the poverty alleviation projects at the rural level and the use of funds should also be publicized. Consciously accept supervision from all walks of life; on the other hand, it is necessary to supervise accountability, find out the problems of violations and disciplines, deal with them together, be accountable, expose them together, and resolutely prevent poverty alleviation funds from being misappropriated.


The development of SMEs is the focus of financial efforts


In response to the Economic Daily reporter’s question about how fiscal and taxation policies support the development of SMEs, Liu Wei said that last year, the financial department took a series of measures to alleviate the burden of corporate taxes and fees, ease the financing of corporate financing, and so on. The development of SMEs is the focus of financial efforts. This year we will 'enforce'."


Liu Wei said that at the beginning of this year, a number of favorable policies have been issued, including the adjustment of the criteria for the identification of small and meager enterprises. In the past, industrial enterprises were based on the total assets of 30 million yuan, and other enterprises were 10 million yuan, which are now raised to 50 million. The standard of the yuan, that is to say, less than 50 million yuan, has the conditions for being recognized as a small and profitable enterprise."


In terms of taxable income, it used to be less than 1 million yuan and is now raised below 3 million yuan. This has included 17.98 million companies in the adjustment range.


In addition to tax cuts and fee reduction measures, the financial sector also promotes enterprises to solve financing problems. It is reported that the financial department has arranged 10 billion yuan for the interest subsidy of entrepreneurial guarantee loans. "The scope has been expanded, including farmers who have started their own businesses in rural areas, and in the past they were only limited to towns." Liu Wei introduced.


Put a "tightening spell" on local government debt


At present, the local government debt risk in China is generally controllable. "Of course, there are indeed some local governments that still have legal restrictions on the illegal use of financing platform companies or disguised borrowing debts, that is, the so-called government implicit debt. In this respect, we have taken strict measures to allow new hidden Sexual debt, while at the same time steadily resolve the stock." Liu Kun said that the next step, will strictly block the "back door" of illegal and illegal debts, put a "tightening spell" on local government debt, and resolutely lay a good fight against the major risks.


In terms of curbing the increase, it is strictly forbidden to violate the law and guarantee financing, and it is strictly forbidden to borrow money in the name of government investment funds, government and social capital cooperation, and government purchase services.


In terms of resolving stocks, we must adhere to the principle that the central government does not help, and insist on who is responsible for the debts, and to do "who is the home of the children."


Promote transformation, promote the open and transparent, legal and compliance operation of financing platform companies, strictly prohibit new financing platform companies, promote the market transformation of financing platform companies, divest the financing functions of financing platform companies, and resolutely stop local governments from changing public welfare institutions. Become a financing platform.


In terms of supervision and accountability, “resolutely investigate and punish violations of laws and regulations, find together, investigate and deal with, accountability, lifelong accountability, and investigate responsibility, and firmly hold the bottom line without systemic risks.” Liu Kun said. Source: Economic Daily

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