On 5 March, the opening session of the second session of the 13th National people's Congress was held at the Great Hall of the People in Beijing. Premier Li Keqiang delivered a government work report and announced the implementation of a larger tax cut. The tax cut, focusing on reducing the tax burden on manufacturing and small and micro enterprises, required to put equal stress on inclusive tax cuts and structural tax cuts, and deepen the value-added tax (VAT) reform. It also required to ensure significant tax cuts in some major industries, reducing the current 16% tax rate in industries such as manufacturing to 13%, and reduce the current 10% tax rate in industries such as transportation and construction to 9%.
It is reported that, as the largest tax category in China, the total VAT in 2017 reached 5.64 trillion yuan, accounting for 39.1% of the total tax revenue. The tax reduction is expected to further reduce the tax burden of Chinese enterprises and individuals, is expected to positively promote the expansion of domestic demand and consumption.
The tax reduction this year has increased significantly. The government reduced the VAT rate once in May 2018, when the VAT rate was reduced from 17% to 16%, and the VAT rate for transportation, construction, basic communications services and goods such as agricultural products was reduced from 11% to 10%. But as the reduction is relatively small, it failed to stimulate the market. This time, the reduction is large, which is expected to successfully stimulate the market.
Tax reduction has a positive impact on enterprises’ operation and getting more profits, and may also play an important role in reducing the price of cotton and cotton yarn in the future.
The city is renowned as the socks capital of the world. With over 100 employees, our company covers an area of more than 8000 square meters.