China Extends Manufacturing Tax Payment Deferral... Strengthens Financial Support

[Image source=Yonhap News]

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] Chinese state media Xinhua News Agency and other local media reported on the 15th that China has decided to extend its tax payment deferral policy for the manufacturing sector.

According to the report, Premier Li Keqiang chaired a State Council meeting on the 13th and stated, "The key to stabilizing the economy is to protect market entities," announcing this decision to support enterprises. He particularly emphasized the manufacturing sector, which is struggling due to government pandemic control measures amid the COVID-19 outbreak, urging the Party Central Committee and the State Council to strengthen relief efforts.

In fact, Chinese manufacturing companies have been facing difficulties due to overlapping challenges such as COVID-19 prevention measures, soaring raw material prices, and severe power shortages. Accordingly, since last year, the State Council has been deferring tax payments for small and medium-sized manufacturing enterprises. Under the new policy, some tax payments, including income tax for small and medium-sized manufacturing enterprises and self-employed individuals, will be deferred for an additional four months starting from September 1. The related amount is approximately 440 billion yuan (about 87.9912 trillion KRW).

Premier Li also emphasized that promoting equipment renovation in economically and socially vulnerable sectors can serve as a driving force for expanding manufacturing demand and restoring consumption. Accordingly, in the fourth quarter, manufacturing, social service sectors, small and micro enterprises, and self-employed individuals will be able to obtain loans for equipment renovation costs from banks at low interest rates below 3.2%. The People's Bank of China will provide special re-lending for 100% of the loan principal. The re-lending amount is about 200 billion yuan, and the period can be extended twice annually for one year. The media reported that if the central government's 2.5% discount rate policy is implemented, the actual loan interest burden for companies renovating equipment in the fourth quarter will not exceed 0.7%.

This content was produced with the assistance of AI translation services.