Lower Taxes, Greater Social Spending in China

March 19, 2012 Taxation in China

Lower tax for people and business in ChinaBEIJING – In order to encourage greater business and social development in the country, throughout 2012 the government of China will lower tax obligations and continue its efforts to improve social development programs.

In a speech delivered during the annual meeting of the China Development Forum in Beijing on March 18th, the Minister of Finance of China Xie Xuren described four primary goals that will be pursued by the government to achieve rapid economic growth and greater social stability in China, while increasing the livelihoods and purchasing power of citizens.

According to the Finance Minister, in 2012 the government is planning to implement a series of tax cuts for businesses and individuals, and the thresholds for value added tax and corporate income taxes will also be raised. Both changes are intended to aid the growth and creation of micro sized enterprises.

During 2012 the government intends to continue to extend its social development programs, with the aim of boosting the purchasing power and income levels of the population, and improving the availability and affordability of education, health care and housing.

In order to raise economic efficiency and reduce wasteful social spending, the government will take steps to optimize its own expenditures, improve controls over development projects, and to ensure that the administration costs and general expenses of social development projects are kept at reasonable levels.

The Minister also said that over 2012 the government plans to pursue economic policies aimed at promoting and fostering greater investment into innovative projects which will boost business competitiveness of China. New programs will also be initiated to spur the development of technology in remote regions of China, and encourage the modernization and improvement of traditional industries.

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