China’s government cut more than 1.5 trillion yuan ($213.1 billion) in taxes during the first three quarters amid substantial reductions in value-added tax (VAT) and individual income tax, according to a taxation official.

The government reduced businesses’ tax burden by 703.5 billion yuan in the period through VAT reform, said Cai Zili, a deputy director of the office responsible for tax cuts at the State Taxation Administration, during a Wednesday press conference. Individuals have paid 442.6 billion yuan less thanks to the tax cut policy, while small businesses have enjoyed preferential cuts of 182.7 billion yuan.

In addition, the government has also cut fees — mostly corporate fees — totaling 272.5 billion yuan, Cai said.

The two main beneficiaries of VAT reductions were manufacturers and the wholesale and retail sector. The former paid 473.8 billion yuan less in duties, accounting for 31.4% of total VAT cuts. The latter stumped up 325.8 billion yuan less, equivalent to 21.6% of the cuts.

The Chinese government has promised to cut taxes and fees by around 2 trillion yuan this year in order to beef up domestic demand amid a slowdown in the world’s second largest economy. That follows about 1.3 trillion yuan of reductions in 2018.

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Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

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