Favorable tax and fee policies front-loaded to shore up enterprises

China has unveiled more than 20 tax and fee policy measures in support of market players since the beginning of the year in a bid to boost business growth quickly, the Ministry of Finance said on Wednesday.

The front-loaded supportive measures, including value-added tax credit refunds worth 1.5 trillion yuan ($235.2 billion), are expected to tide companies over difficulties and boost their confidence, Xu Hongcai, vice-minister of finance, said at a news conference on Wednesday.

To ensure local governments are financially capable to implement the tax refunds that will start in April, the finance ministry has allocated 400 billion yuan in transfer payments to local governments on Monday, Xu said.

According to an executive meeting of the State Council on Monday, China will start to fully refund newly-added VAT credits to some market players starting April 1, including micro and small enterprises, self-employed businesses and manufacturers. Their outstanding VAT credits will be fully refunded in one lump sum this year.

The country will allocate 1.2 trillion yuan in transfer payments this year to support local governments implementing the VAT credit refunds and tax and fee cuts, safeguarding employment and ensuring people's basic living needs.

With the transfer payments compensating for the decrease in fiscal income due to tax refunds and cuts, Xu said local governments will be able to put the supportive tax policies into place and keep local public finance running steadily.

The VAT credit refunds, as the bulk of this year's favorable tax and fee policies, will directly provide cash flow for businesses, support their technological upgrade and equipment replacement and therefore effectively boost business growth and economic development, Xu said.