Entrepreneurs who are deputies to the 13th National People's Congress (NPC) have applauded the large-scale tax cuts, a fiscal policy highlighted in this year's government work report delivered by Chinese Premier Li Keqiang on Tuesday.
Li announced: "We will introduce both general-benefit and structural tax cuts, focusing primarily on reducing the tax burden in the manufacturing sector and on small and micro businesses."
Lei Jun, founder and CEO of China's homegrown technology company Xiaomi, said he was excited about the tax reduction measures, especially the one to reduce the current value-added tax (VAT) rate of 16 percent in manufacturing and other industries to 13 percent.
He said he hadn't expected the cut could be so large, and as VAT is China's biggest tax category, the measure would benefit almost all companies in the country.
"I think manufacturing companies need to invest the money saved from the tax reduction into research and development to improve the quality of our products," Lei added.
Dong Mingzhu, chairwoman of Gree Electric Appliances, said the government was obviously working for the interests of businesses, who in turn needed to put themselves in the government's shoes.
Gree would try to expand its scale, enhance its capacity for independent innovation and develop key technologies to contribute more to China's economic growth, she said.
Zeng Qinghong, chairman of Guangzhou Automobile Group Co., Ltd., a leading carmaker said the tax reduction should help the joint-stock company save about 5 billion yuan, based on last year's sales revenue.
"I believe the measure will bolster investor confidence and give additional impetus to the development of businesses in China," he said.
Yang Yuanqing, chairman and CEO of Lenovo Group Ltd., a Chinese multinational technology company, said lightening the tax burden on businesses would help boost the growth of consumption.
With a lower VAT rate, final goods prices will decline, thus encouraging consumer spending and helping ensure stable economic growth, Yang said.
Xia Wenyong, a deputy of Jiangxi province and president of Xinyu Iron and Steel Group, also joined other entrepreneurs in hailing the promised tax cuts in the government work report. The scale of tax cuts being very large was very good news for entrepreneurs, Xia said.
Holding the report document in his hand, Xia added that he had already begun to look forward to the implementation of these encouraging policies as soon as possible.
According to the report, the moves to cut tax also include lowering the VAT rate in the transportation, construction, and other industries from 10 to 9 percent, continuing to cut the number of VAT brackets from three to two and simplifying the overall system, etc.
They are the result of a major decision taken at the macro policy level in support of the efforts to ensure stable economic growth, employment, and structural adjustments, according to the report.