China to allow deferrals of govt-levied charges, tax concessions for private pensions

BEIJING - China will allow market entities to defer payments of certain government-levied charges to further reduce financial burdens, and offer tax concessions for private pension schemes, according to a State Council executive meeting.

At the meeting, chaired by Chinese Premier Li Keqiang on Monday, decisions were also made to enhance government services, ensure a bumper autumn harvest with improved rural infrastructure, and promote the development of the self-employment sector.

Payments of certain government-levied charges and deposits will be temporarily deferred to further ease the burdens on market entities and help them overcome difficulties.

"Market entities, especially micro, small and medium-sized enterprises, self-employed households and manufacturing firms now face considerable difficulties," Li said. "Postponing the collection of government-levied charges and deposits is an important step to support market players. All policies must be delivered on the ground without delay."

The meeting rolled out an additional set of fee deferral policies for the fourth quarter of this year. Payments of 14 government-levied charges, including farmland reclamation fees and sewage and household waste disposal fees, amounting to over 53 billion yuan ($7.49 billion) will be deferred without incurring overdue fines.

Localities will be encouraged to postpone the collection of sub-national government-levied charges for enterprises, and arbitrary charges will be strictly prohibited.

Payments of project quality deposits of various kinds, totaling approximately 63 billion yuan, will be deferred. Due responsibilities must be fulfilled and promises delivered with concrete actions to ensure market entities truly benefit from the policies.

"Relevant institutions and charge-levying mechanisms should be refined to foster a world-class and market-oriented business environment governed by a sound legal framework," Li said.

It was decided at the meeting that tax concessions would be offered for private pension schemes that enjoy policy support and are run commercially.

The meeting noted that such private pension schemes are useful complements to the basic old-age insurance scheme, and can better meet people's diverse needs and enhance social security safeguards.

Personal income tax concessions will be made available for these private pension schemes. Participants will be entitled to a contribution deduction of up to 12,000 yuan each year from their annual taxable income.

No tax will be levied on investment yields for the time being. The actual tax burden for receiving pension benefits will be lowered from its previous 7.5 percent to 3 percent. This policy will be applied retroactively to Jan 1 this year.

"The policy supports we are introducing this time will deliver sizable benefits. In the process of implementation, we need to gradually fine-tune the policies and sum up experience before applying them more broadly," Li said.

The meeting also decided on measures to make more government services inter-provincially accessible to unlock market vitality further and bring greater convenience to the people.

On top of the 187 government services already inter-provincially accessible, an additional 22 high-demand items that affect a wide range of sectors will be added to the list to address the pressing concerns of households and businesses.

Inter-agency information sharing will be enhanced and operational standards aligned to make more inter-provincial services available online and processed on a one-stop basis. The needs of senior citizens for in-person services will also be well met. Personal privacy and trade secrets will be protected pursuant to the law.

Moreover, genuine efforts will be made to ensure a bumper autumn harvest. The country's grain output this year is set to hit its target of more than 650 billion kilograms, according to the meeting.

The construction of existing agricultural and rural infrastructure projects will be accelerated, and a number of new projects will break ground, with investments worth over 300 billion yuan expected to be completed this year.

A draft regulation on promoting the development of self-employed individuals was also passed at the meeting.

The draft clearly stipulates equal access and fair treatment for self-employed people, the protection of their property rights and business autonomy, and policy support in taxation, fees and finance.

China's 160 million market entities, including 110 million self-employed households, play a unique role in propping up employment, improving people's livelihoods, and promoting the unimpeded micro-circulation of the economy.