Today, the Babusha Forest Farm on the southern edge of the Tengeri Desert has transformed from a desert to a cornucopia. The forest farm established Babusha Greening Co Ltd in 2012 to carry out the sand control and afforestation work of the Three North Shelterbelt Forest Program, using the model of "company plus base plus farmers". The company has been operating well.
In 2019, the forest farm enjoyed more tax benefits and greater tax reduction because of deepened VAT reform. The company is expected to earn 7.8 million yuan ($1.13 million) and enjoy tax cuts amounting to as much as 250,000 yuan. The saved money will be used to invest in other projects and drive more people to participate in afforestation. Ordinary employees in the forest farm have also enjoyed the dividends of the policy. Some staff have been exempted from individual income tax since the threshold was lifted to 5,000 yuan.
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.