Tax Cuts for Small Companies Unveiled to Help Stabilize Growth
Details for income tax cuts were unveiled last Tuesday that will apply to more small businesses as part of the country’s steps in stabilizing growth. Small companies that have an annual income of around 100,000 yuan or lower are now taxed half of the amount or at a rate of 20 percent. The policy will be retroactive up to January 1, 2014 and will be valid until December 2016.
The flagging economic growth of the country has unnerved potential global investors and has spread speculation on a possible modest stimulus package that is intended to boost economic activity. The two surveys of the vast manufacturing sector in China has shown that factories are facing persistent headwinds since March which raised fears on the economy is cooling down faster than they thought.
Aside from the tax sweetener for smaller companies, the government stated that it will speed up the construction of rail projects that has already been approved and will also be increasing the total length of line by 18 percent. The government will also aim to increase economic growth to 7.5 percent for 2014 but analysts believe that the growth will possibly fall short of the target 7.5 percent for 2014.