The China Banking Regulatory Commission and the China Insurance Regulatory Commission will be merged in the biggest industry overhaul since 2003.
China will reduce the tax burden for small and micro-sized companies by 200 billion yuan ($29 billion) per year for the next three years, the latest government move to aid smaller corporates that are struggling as the economy slows.
The decision to cut corporate-income tax, value-added tax and other corporate taxes was announced on CCTV after a state council meeting chaired by Premier Li Keqiang on Wednesday. It came right after the central bank said its new program to encourage banks to lend to small and private companies would begin later this month.
Headwinds for the world’s second-largest economy are rising as investment at home slows, profits shrink, consumers tighten their wallets and an external outlook is clouded by the trade war. Policy makers have rolled out an array of measures to boost the economy, including another cut last week by the central bank to the amount of money lenders must hold as reserves.
More fiscal support in 2019 is also widely expected. Chinese President Xi Jinping pledged in his new-year speech that the government will implement a tax cut as part of efforts “to ease the burden on enterprises.” The Ministry of Finance is set to propose a larger deficit target for this year than in 2018, which should give it room to boost spending and cut taxes.
The other minor levies cut in the decision include the land-use tax, city-maintenance tax, stamp duty, resource tax and farmland-conversion tax.
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