Chinese private investors offered preferential tax rates

June 7, 2012 7:24 am


China wants prop up its economy without overly relying on monetary or fiscal stimulus/XINHUA
BEIJING, Jun 7 – China has issued a policy offering preferential rates of tax for private investment, a move to assist investors in accessing the country’s state-dominated sectors.

The State Administration of Taxation (SAT) said in a statement released on Wednesday that the tax policy, compiled according to existing regulations, covers six major tax categories and 33 sub items.

It comes after several long-monopolized sectors opened to private capital, a move anticipated by the market since May 2010, when the government published an instruction encouraging the participation of private investment in state-run sectors to increase the economy’s efficiency.

Sectors including finance, transport, railway and healthcare, have so far been given the green light to open to private capital, as China, with its first-quarter gross domestic product growth hitting a near-three-year low of 8.1 percent, looks to prop up its economy without overly relying on monetary or fiscal stimulus.

Of the total sub items, 11 cover social undertakings, nine cover basic industries and infrastructure sectors, and seven innovation and industry upgrading. Other sub items relate to public utilities, affordable housing, financial services, and trade circulation.

While stressing the role of taxation in encouraging and guiding private capital, the SAT urged taxation authorities at all levels to effectively implement the policy.


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