Tax and fee cuts have helped China’s economy this year, likely contributing 0.8 percentage points to GDP growth, China’s finance minister Liu Kun said on Wednesday.
As China’s growth has slowed, amid sluggish domestic and global demand and the U.S.-China trade war, policymakers have cut taxes and fees, boosted infrastructure investment, and eased monetary policy to stimulate the economy.
In January-to-October, the government cut taxes and fees by the value of 1.97 trillion yuan ($281.5 billion), and the cuts for the whole year are likely to surpass 2 trillion yuan, accounting for over 2% of the annual GDP, Liu said in a report delivered to lawmakers.
However, he also warned that the cuts have put pressure on government revenue. Data from the Ministry of Finance show that fiscal revenue rose 3.8% year-on-year in the first 11 months of this year, down 2.7 percentage points from the growth rate of the same period last year; and tax revenue only grew 0.5% year-on-year, down from the 9.5% growth of the same period last year.
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Contact reporter Guo Yingzhe (email@example.com)