Data from the State Taxation Administration show that in March alone 2.57 million enterprises nationwide have benefited from the policy of allowing small, medium and micro-enterprises to extend the deadline of paying taxes due to the pandemic. The delayed tax payments amount to 256.7 billion yuan ($40.3 billion).
Since the start of the COVID-19 pandemic, delaying tax payments has become a major fiscal policy to help enterprises tide over the difficulties. As early as 2020, the STA issued a notice allowing certain small- and micro-sized enterprises to delay paying their revenue tax in order to ease the pressure on them. That measure was upgraded in 2021 and further upgraded in 2022, as the STA and the Ministry of Finance co-issued a notice on Feb 28, allowing another extension period for the tax owed for the fourth quarter of 2021.
With the delay in tax payments, many enterprises have been able to survive that otherwise would have gone under.
In a way, the government has benefited, too, because the risk of large numbers of enterprises going bankrupt has been reduced, thus ensuring future tax revenues and stabilizing the economy.
A good policy cannot go without good implementation measures, which feature simple procedures and low thresholds. The STA has done well in this by having updated the tax management system and automatically granting taxpaying enterprises an extension via the system. Those who need to delay paying their tax do not need to fill in complicated forms or stand in long queues at the offices of tax bureaus.
In order to let more small business owners know about the policy, the STA prompted local taxation departments to update their WeChat public accounts and push information via apps, so that all enterprises that meet the standards will get the information in time.
The policy is also expanding to other areas. According to a recent executive meeting of the State Council, China's Cabinet, certain sectors heavily hit by the pandemic are allowed to delay paying the endowment and industrial injury insurance fee, while some financial institutions will be able to delay enterprises repaying their loans.
All these efforts are concentrated on one purpose: To help enterprises overcome the difficulties and stimulate the vitality of the market.