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China's top tax watchdog said Wednesday that the country's tax and fee cuts totaled 742.8 billion yuan (about 105 billion U.S. dollars) in the first quarter of the year.
Of the total, the preferential tax and fee measures unveiled in 2020 to support economic development and the containment of the COVID-19 pandemic saved a total of 318.2 billion yuan, Cai Zili, an official with the State Taxation Administration, told a press conference.
"The cut is composed of two parts. 318.2 billion yuan from the new policies to support pandemic control and social-economic development. 424.6 billion yuan from tax reduction policies that began last year. The nation also rolled out policies including expanding automobile purchasing and other measures to help market players, especially medium, small and micro enterprises, to overcome difficulties", Cai said.
China's State Taxation Administration holds press conference on April 29, 2020 in Beijing on tax cuts. Su Yu /State Taxation Administration
The remaining 424.6 billion yuan of taxes and fees were reduced as a result of the implementation of a larger scale of tax and fee cut policies rolled out last year.
In Q1, the government collected a total of 3.48 trillion yuan in tax revenue after deducting export tax rebates, down 16.4 percent year on year.
The government also is allowing refunds on taxes for some exporting companies.
"After the adjustment, all exported goods, except those dealing with heavy energy consumption, heavy pollution, and resources, can get refunds on the taxes they pay, so zero tax for them. This helps those companies improve international competitiveness", noted Fu Shulin, spokesperson of the State Taxation Administration.
The tax data also reveals business performance. Officials say that from February 20th, when the pandemic eased, and work resumed, Chinese companies' sales revenue recovered to 95 percent around this same time a year ago.
Manufacturing industries are also on the mend. Their sales revenue reached 99 percent compared to this period in 2019. Nearly half of the companies performed even better in industries like food and metal production.
High-tech industries are leading the recovery, surpassing comparable income from 2019. Tax officials said telecom appliances and medical equipment production performed best.
"Demands from working at home and online education have helped new industries develop quickly. Residents' telecom services, internet service, and digital cultural services saw more comparable sales income from last year ", Cai said.
The tax revenue drop was expected to narrow in Q2 as the resumption of life and production was accelerating, Cai said.
Since the outbreak of the epidemic, China has rolled out a slew of tax and fee relief measures to alleviate the burdens of market entities, especially small firms and self-employed businesses.
(With input from Xinhua)
(Wu Guoxiu also contributed to the story)
