Tax Breaks Offered to Help Companies with Construction of Water Projects
To help more companies and to speed up construction of water projects the government is extending a income tax break to boost fiscal support in a cooling economy. The program will be offering discount corporate tax rates down to a fifth, and will be widen to cover firms with an annual taxable income of 200,000 yuan. Before the tax break was only offered to companies having taxable income of less than 100,000 yuan.
In 2013, China showed economic growth of 7.4 percent is worst in 24 years and have dragged down by a sagging housing market and a cool down in sectors from manufacturing to exports. Analysts are now expecting growth in the second largest economy to fall further this year down to 7 percent. Even if the economy is facing a downward pressure and needs an active fiscal policy to strengthen the growth in a reasonable range.
To cut costs and spur employment, the unemployment insurance fee that is being paid for by employers will be cut down to 3 percent to 2 percent of workers wages, thus saving companies around 40 billion yuan a year. The saved money will then is used on public services and improve livelihoods and help steady the economy. Construction will begin as soon as 100 large hydro projects from water conservation to irrigation are approved since 90 percent of the fund for these projects is financed by the Central Government allocation in June.
Local governments that are responsible for infrastructure construction but have limited funds ca n seek for funding using loans and private investment.