Over 30 years ago, Xi Jinping was Party secretary of Ningde, then an impoverished prefecture in China's eastern province of Fujian. When some local officials suggested more taxes on enterprises to boost fiscal revenue, he immediately rejected the idea, comparing it to "draining the pond to get all the fish."
As Chinese president, Xi has been dedicated to helping businesses grow. Now, a campaign to reduce the burdens on businesses is in full swing.
An array of measures rolled out over the past years, including reforms on the value-added tax (VAT) and reduction of administrative fees, have already been fruitful.
Thanks to the tax and fee reduction initiative, over 8.6 trillion yuan ($1.3 trillion) of taxes and fees were saved for enterprises nationwide from 2016 to 2021.
As the economy faces the triple pressure of shrinking demand, supply shock, and weakening expectation amid the pandemic, helping struggling businesses is more pressing than ever.
Since the beginning of the pandemic, Xi has chaired key meetings and made inspection tours to make sure relief measures are more targeted and effective.
In February 2020, he called for the roll-out of more targeted interim policies to cut taxes and fees to help micro, small and medium-sized firms tide over difficulties.
During an inspection tour in Northwest China's Ningxia Hui autonomous region in June that same year, Xi said policies designed to reduce tax burdens on companies should be implemented fully.
Yuchen Building Materials, a small manufacturer in Southwest China's Chongqing municipality, struggled to cover the pay for its over 30 employees when the pandemic hit business. But thanks to a tax cut worth 350,000 yuan for 2021 and another 130,000-yuan tax payment deferral at the beginning of this year, the company's prospects took a turn for the better.
Yuchen's experience, not an isolated case, has played out across the country. With massive tax and fee cuts, the cash flow of businesses, vulnerable small ones in particular, has significantly increased. Their confidence has improved and new market vitality has been unleashed.
The efforts to support businesses will continue.
In the annual government work report, China announced plans for a record 2.5 trillion yuan in tax refunds and cuts this year, including VAT credit refunds worth around 1.5 trillion yuan. Nearly 1 trillion yuan of VAT credit refunds will go to micro and small enterprises and self-employed individuals, according to a State Council executive meeting on Monday.
Market entities support the employment and entrepreneurship of hundreds of millions of people, according to the annual Central Economic Work Conference in December, where Xi delivered a key speech.
"We will continue to implement new tax and fee cuts to help them, especially micro, small and medium-sized enterprises and self-employed individuals, ease their burden and restore their vitality," a statement released after the meeting said.