China to cut company tax and fees further to spur growth: minister

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BEIJING (Reuters) – China will cut company taxes and fees further this year to support economic growth, Finance Minister Liu Kun told state television in an interview aired on Friday.

Chinese officials have pledged more aggressive reductions in 2019, after cutting about 1.3 trillion yuan ($192.82 billion)in taxes and fees last year.

“We will step up new tax and fee cuts this year on the basis (of last year) to lower companies’ burden, stimulate vitality of firms and promote economic growth,” Liu said, adding that value-added tax (VAT) would be reformed.

Policy insiders expect the government to cut VAT, which ranges from 6 percent for the services sector and 16 percent for manufacturers.

Tax cuts for small and private firms from Jan. 9 will lower their costs by 200 billion yuan a year, he said.

Liu also said the government was studying a plan to lower social security fees to reduce the burden on small companies. He said China’s proactive fiscal policy would send a clear signal to companies.

(Reporting by Kevin Yao and Min Zhang; Writing by Se Young Lee; Editing by Nick Macfie)