On May 22, Premier Li Keqiang delivered the 2020 Government Work Report at the third session of the 13th National People's Congress, unveiling a raft of measures intended to benefit enterprises and the people.
Further cut taxes and fees
To help market entities overcome difficulties and achieve development, fresh tax and fee cuts of about 500 billion yuan ($70.1 billion) will be in place as China continues to lower value-added tax rates and the share of employees' basic old-age insurance paid by enterprises, Premier Li said.
Tax and fee reduction policies introduced early this year that are due to expire by June will all be extended till the end of the year, the Premier said. They include "exempting micro, small, and medium businesses from contributions to basic old-age insurance, unemployment insurance, and work injury compensation insurance schemes", and "reducing or cancelling VAT for small-scale taxpayers", among others.
"The payment of corporate income taxes by micro and small businesses and self-employed individuals will be postponed to next year," he added.
Corporate burden is expected to be reduced by more than 2.5 trillion yuan this year, Premier Li said, requiring solid implementation of the policies to help businesses survive and thrive.
His introduction of those measures won constant applause from deputies at the session.
Blaze a new trail through reform and opening-up
Amid uncertainties over the COVID-19 epidemic and the world’s economy and trade, China should focus on stabilizing six fronts — employment, the financial sector, foreign trade, foreign investment, domestic investment, and expectations — and securing six areas — job security, basic living needs, operations of market entities, food and energy security, stable industrial and supply chains, and the normal functioning of primary-level governments, Premier Li said, highlighting their importance for steadying the fundamentals of the economy and building a moderately prosperous society in all respects.
Reform and opening-up should be carried out to keep economic growth stable, and "we need to blaze a new path that enables us to respond effectively to shocks and sustain a positive growth cycle," the Premier said.
Set up special transfer payment mechanism directly benefiting businesses and people
To ensure employment and people’s livelihoods, support must be given to market entities, especially micro, small and medium businesses, and self-employed individuals, to help them through tough times, Premier Li said.
The report mentioned a special move to transfer 2 trillion yuan, consisting of 1 trillion yuan in fiscal deficit and 1 trillion yuan in government bonds for COVID-19 control, to local governments. With a special transfer payment mechanism, the funds will directly benefit businesses and the people through designated uses mainly for employment, basic living needs, and market entities, including tax and fee cuts.
Greater efforts will be made to improve the composition of fiscal spending. Spending on people’s basic well-being will be only increased and not cut and spending in key areas will be ensured, said the Premier.
Meet basic living needs of people and address issues of public concern
Meeting basic living needs of people is a major part in this year’s work report. "Despite the difficulties we face, we must unfailingly meet the basic living needs of our people and address issues of public concern." Premier Li stressed in the report.
Efforts will be made to improve basic medical services, with higher government subsidies for basic medical insurance for rural and non-working urban residents; bolster education of various types and stages, including offering students from rural and poor areas wider access to colleges and universities; and assist disadvantaged groups such as retirees, demobilized military personnel, and rural migrant workers with backing from related measures, according to the report.
"We must rely closely on the people, respect the pioneering spirit of those working at the primary level, advance reform and opening-up with greater force, ignite the dynamism of our society, and bring together the energy and ingenuity of hundreds of millions of Chinese people. This is the source of inspiration that enables us to prevail over all difficulties and challenges," Premier Li said in the report.