Banyan Village in Northwest China’s Qinghai province is home to a traditional Tu tribe, and is an area of concentrated poverty in Liupan Mountain. In 2016, a poverty-relief relocation project was launched by the local government to improve the living environment. Ha Chengqing, manager of the Circle Embroidery Garden, together with village cadres, began to develop the circle embroidery industry and paved a new path to the good life for villagers.
With the advancement of poverty alleviation and tax and fee reduction policies, rural eco-tourism emerged in the village and the ethnic handicraft circle embroidery has become popular in the market. Since the implementation of tax reductions and fee cuts, the company has saved taxes of as much as 120,000 yuan ($17,386.77). This money was used to purchase a batch of sewing machines for the Circle Embroidery Garden so it could employ more local villagers to work in their hometown.
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. Find the previous episodes below and stay tuned for more.