On March 5, Chinese Premier Li Keqiang delivered the 2019 Government Work report clarifying the government plans for this year. The following are some hot topics of the report:
Reduction of value-added tax (VAT) rates:
・ The 16% VAT rate, which applies to the manufacturing sector, will be lowered to 13%.
・ The 10% VAT rate, which applies to construction and transport, will be lowered to 9%.
・ The 6% VAT rate, which applies to services, will remain the same.
・ Starting from March 1st, VAT on 21 medicines and 4 active pharmaceutical ingredients for treating rare diseases will be cut from 16% to 3% to help reduce costs and ease financial difficulties for patients.
Reduction of social insurance costs for employers: The pension contribution rate for employers will be lowered to 16%. VAT will be lowered on April 1st and the social security rate will be lowered on May 1st.
Reduction of fees: The price for commercial power usage will be lowered by 10% and the price for commercial internet usage will be lowered by 15%.
・ Reduce the negative list of foreign investment.
・ Add a new area to Shanghai’s Pilot Free Trade Zone.
・ Continue to promote Sino-US economic and trade consultations.