Shenzhen reduced taxes by 241.14 billion yuan (US$3.55 billion) for local enterprises last year, an increase of 2.64 billion yuan, or 12.3 percent, compared to 2017, according to the city’s tax bureau, the Southern Metropolis Daily reported.
Total tax relief for the private sector, mainly joint-stock companies and private enterprises, amounted to 170.57 billion yuan, an increase of 10.2 percent year on year and accounting for 70.7 percent of total tax cuts.
Tax preferential policies for the high-tech industry have reduced enterprise income tax by 56.78 billion yuan, an increase of 61.3 percent over the previous year.
Meanwhile, 14,577 enterprises have enjoyed tax deductions for R&D expenditures, up 222.5 percent year on year. The amount of value-added tax deductions for high-tech firms reached 71.27 billion yuan, a year-on-year growth of 64.59 percent.
In 2018, the State Council successively introduced tax reduction measures such as tax deductions for R&D expenditures, preferential policies for venture capital enterprises and small and micro-sized enterprises, an increased export rebate rate and deeper value-added tax reform.
This year, the tax reduction reform will be scaled up even further, benefitting an expected 20,000 more local small and micro-sized enterprises regarding enterprise income tax, according to a staffer with the local tax bureau.
The reduction of the social security contribution rate for enterprises has also delivered real benefits to local enterprises by lowering their financial burden, according to the Shenzhen Economic Daily.
Over the past three years, the tax cuts accumulated through the reform of Shenzhen’s social insurance payment system have reached 30.52 billion yuan, according to the Daily.
Additionally, three categories social insurance security fee rates were reduced recently. At present, the minimum contribution rate for the five items of statutory social insurance combined in Shenzhen is 23.09 percent, which is lower than in other cities in China.