More tax relief means more government responsibilities

The government might have cut an additional 1 trillion yuan ($157 billion) in taxes and fees in 2021. It could also provide greater tax and fee relief for businesses in 2022, in order to inject new vitality in market players.

These issues were the subject of a discussion at a video conference on national fiscal work in Beijing on Monday.

In recent years, China has cut taxes and fees on a large scale－about 1.3 trillion yuan in 2018, more than 2 trillion yuan in 2019, and about 2.5 trillion yuan in 2020. Theoretically, the higher the tax and fee relief a country offers, the less room it will have to do the same in the future.

However, despite cutting taxes and fees on a colossal scale in the past few years, China proposes to offer even bigger tax and fee relief in 2022, showing its determination to further benefit enterprises and the people.

Businesses and individuals will benefit the most from these cuts, as the easing of the tax burden increases their ability to resist risks and makes enterprises more competitive. Tax and fee cuts can also help create jobs, increase people's incomes and reduce the cost of consumer goods.

The healthy development of enterprises following the tax and fee cuts will also create a solid foundation and favorable condition for the steady development of the macro economy.

Some favorable tax and fee relief policies have been introduced over the past two months, and new ones have been studied and formulated, laying the foundation for even bigger tax and fee relief in 2022. However, it should be noted that greater tax and fee relief needs to be accompanied by stronger supporting measures.

An inspection in Bazhou, Hebei province, in the recent past found that some local governments had introduced many arbitrary fees and fines. Similar problems were found in other regions too.

Although, following the investigation, most of the fees collected in this manner has been returned, more such cases might have gone undetected, denying enterprises the benefit of the authorities' tax and fee cuts.

Also, greater tax and fee relief in 2022 means a drop in government revenue. And given the downward pressure on the economy, some local governments might impose arbitrary charges or reduce spending to improve people's livelihoods. The top authorities should keep an eye on such developments.