On Wednesday, the State Council, the country’s Cabinet, decided to delay collecting income tax, domestic value-added tax, domestic consumption tax and urban construction maintenance tax from small and medium-sized enterprises, as well as the personal income tax of self-employed businesses, individual proprietorship and partnership enterprises, in the fourth quarter.
The move is expected to provide about 200 billion yuan ($31.22 billion) of tax relief for micro, small and medium-sized manufacturing enterprises.
Against the backdrop of the latest wave of infections and the sharp rise in raw material prices, the introduction of large tax relief measures is undoubtedly a timely move to help the majority of the cash-thirsty micro, small and medium-sized enterprises in the manufacturing industry.
The disruption to global industrial and supply chains is deepening amid the repeated impacts of the COVID-19 epidemic. In particular, the price of raw materials has skyrocketed in a short period of time, and local power shortages and floods have also disrupted the operations of many manufacturing companies.
Small, medium and micro enterprises are particularly affected because of their low risk-resistance abilities. But they play an important role in providing jobs and improving people’s livelihoods. So helping them overcome the difficulties should become the focus of China’s macroeconomic policy.
From the perspective of policy effect, the tax delay policy is undoubtedly a makeshift measure to help smaller enterprises overcome temporary difficulties. Although a tax reprieve is not a tax cut or exemption, it still delays payments. With this buffer period, the pressure on these companies will be eased.
In the context of the still evolving epidemic situation, enterprises should seize the chance to improve their ability to cope with various risks and uncertainties.
To resolve their difficulties, the enterprises must rely on their own efforts to enhance their competitiveness in the market so that they can survive and develop.
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