Li Yinghua, a native from Guangxi Zhuang autonomous region, returned to her hometown after graduating from college and learned a traditional technique from her grandma: making 'five-colored' sticky rice. Combining traditional craft with modern packaging, the five-colored sticky rice has become a popular local product for tourists. She hired people from her hometown to help them get out of poverty.
Li Yinghua’s plant no longer needs to pay tax due to the implementation of a large-scale tax and fee reduction policy. The policy has greatly benefited small-sized private businesses like Li Yinghua’s sticky rice workshop, and enabled more people to realize their dream in their hometowns.
In 2019, China introduced unprecedented tax cuts and fee reductions. These reductions exceeded two trillion yuan (about $287 billion), accounting for more than two percent of GDP and contributing about 0.8 percentage points of GDP growth.
Consequently, the business environment has significantly improved, with the benefits of the tax and fee cuts apparent in manufacturing and in medium- and small-sized firms. The inclusive tax reduction for small and micro enterprises (SMEs) stood at about 250 billion yuan.
The policy not only injects vitality into SMEs for their development, but also contributes to the country’s poverty alleviation campaign. But how does it achieve these goals? And what do business owners have to say about it?
This six-part series of stories themed around “tax reduction and fee cut in action” will tell you the answers. This is the first episode and stay tuned for more.