Premier Li: China to cut VAT by three percentage points

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01:26

China will reduce the current value-added tax (VAT) rate of 16 percent for manufacturing and other industries to 13 percent, and lower the rate for such industries as transportation and construction from 10 to nine percent, Premier Li Keqiang said on Tuesday.

Premier Li made the remarks at the Great Hall of the People when delivering the annual government work report.

Supporting measures, such as increased tax deductions for producer and consumer services, will be taken to make sure that tax burdens in all industries do not go up, Li said.

"We will ensure that the general-benefit tax cut policies issued at the start of the year for small- and micro-businesses are put into effect," Li added.

02:36

The moves aim to strengthen the basis for sustained growth while also considering the need to ensure fiscal sustainability, and will be taken to support the efforts to ensure stable economic growth, employment and structural adjustments, he said.

Meanwhile, China will reduce the tax burdens and social insurance contributions of enterprises by nearly two trillion yuan (about 298 billion U.S. dollars) this year.

"We will introduce both general-benefit and structural tax cuts, focusing primarily on reducing tax burdens on the manufacturing sector and on small and micro businesses," Li said.

Loans to be granted to small- and micro-businesses by China's large state-owned commercial banks will increase by over 30 percent in 2019, according to Li.

(CGTN's Yang Zhao also contributed to the story.)