Full transcript of policy briefing of the State Council on Feb 27, 2015

China National Radio:

I have two questions. The first one goes to Vice-Finance Minister Shi Yaobin and Xie Xuezhi, deputy head of the State Administration of Taxation. Would you please elaborate on the implementation of income tax breaks for small and micro-sized companies and any new steps that are planned for these companies after the central government decided to expand tax reduction on Wednesday? The second question goes to Liu Yuting, deputy head of the State Administration for Industry and Commerce. The dispute between the SAIC and China’s e-commerce heavyweight Taobao.com last year received much public attention. How did the SAIC reach the settlement with Taobao? What will the SAIC do in future to supervise the product quality of e-commerce?

Xie Xuezhi:

Good policies have to be carried out well, otherwise they’re just empty words. Just now Vice-Minister Shi explained that we have carried out four tax reductions for small and micro-sized companies. Last year has seen an upgraded enforcement of those policies. In April last year, the threshold of business taxable income was raised from 60,000 yuan to 100,000 yuan, a change that has brought great pressure to bear on taxation authorities in terms of policy implementation. Measures taken last year to implement the policy covers three aspects. First, it has to be timely. We have, together with the Ministry of Finance, issued related documents so that taxpayers could be informed timely of such favorable policies and grassroots taxation authorities could carry out the policy in an efficient manner. Second, the implementation is all-round. All favorable conditions pledged in the policy have to be faithfully carried out. Tax authorities made tremendous efforts last year to fully implement policies to ensure that all the taxpayers who qualified for tax reduction can benefit. The last one is convenience. As we implement the tax reduction policies for small and micro-sized businesses, we also improved tax collection and services for these companies. That includes changing preconditioned government approvals to taking records afterwards, providing more proactive and tailored services for taxpayers and opening up hotlines. Meanwhile, we have motivated the taxation authorities of all levels to join the work of implementation, instead of only relying on the grassroots agencies. The State Administration of Taxation and its provincial branches strengthened the supervision on the policy implementation.

Xie Xuezhi:

So far, the public has responded positively to the implementation of tax reduction policies, and tax exempted for small and micro-sized businesses reached 10 billion yuan. Last year we have also raised the threshold for value-added tax to 30,000 yuan, which makes the total tax reduction reach about 60 billion yuan. Another tax reduction policy concerning small and micro-sized businesses is the pilot reform to replace business tax with VAT. These packaged tax cut policies have given small and micro-sized companies all-round benefits. We will faithfully carry out the expansion of tax breaks under five aspects. First, we will issue operational documents to lower the level of tax authorities in a timely manner so that taxpayers can benefit from the policy in their first tax payment period. Second, we will promote the policy through the hotline 12366, on media publications and during the visits of grassroots tax collectors to taxpayers. With these measures, the policy will become more publicized and all the small and micro-sized companies will be familiar with the benefits and procedural requirements of it.

Xie Xuezhi:

Third, we will modify the application system in a timely manner. At the same time, we will further streamline the filing procedures as required by the administrative system reform. Taxpayers will be able to finish the filing procedures at the same time when they fill in application forms, and no longer need to make extra filing procedures. This will relieve the burden on small and micro enterprises. Fourth, we will revise the taxpaying software. An alert message will pop up to remind taxpayers to enjoy preferential policies and calculate the tax reduction accordingly when they make tax declarations using the software. Fifth, we will further strengthen supervision. We have made clear requirements asking the tax authorities to handle and settle the tax cuts for small and micro-enterprises within three days. At last, we believe that the tax authorities will definitely put the policy about letting more small and micro-companies enjoy tax breaks into place, ensure the companies’ development and stimulate the market’s vitality.