A few days ago, at the press conference held by the State Council, an official from the Ministry of Finance said that the Ministry of Finance will comprehensively consider the need of fiscal sustainability and the implementation of the relief and development of small and micro enterprises policies, focus on improving the tax and fee reduction policies, optimize the implementation mechanism, improve the effect of policy implementation. “We will continue to implement the institutional tax reduction policy, and orderly exit the periodic tax reduction and fee reduction policies. We will focus on strengthening tax preferences for small and micro enterprises, increase support for manufacturing and scientific and technological innovation, and continue to clean up fee funds.”

Wang Jianfan, director of the Taxation Department of the Ministry of Finance, said that increasing the percentage of R&D expenses deductions for manufacturing enterprises will be the highlight of tax cuts and fee reductions in 2021. “Starting from January 1, the additional deduction for manufacturing enterprises’ R&D expenses will be increased from 75 percent to 100 percent. This is the largest of our structural tax cuts in 2021.”

 

Improving the VAT retention and rebate policy is another major move to cut taxes and fees in 2021, which is also aimed at increasing support for manufacturing and scientific and technological innovation.