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China to Offer Tax Concessions for Private Pension Schemes

China will offer tax concessions for private pension schemes that enjoy policy support and are run commercially to meet people’s diverse needs, according to the decision made at the State Council executive meeting chaired by Premier Li Keqiang on Sept 26.

The meeting noted that the development of policy-supported and commercially-operated private pension is a useful complement to the basic old-age insurance scheme, and can better meet people’s diverse needs and enhance social security safeguards.

The meeting decided that personal income tax concessions will be made available for those participating in policy-supported and commercially-operated private pension schemes: participants will be entitled to a contribution deduction of up to 12,000 yuan (about $1,687.6) each year from their annual taxable income.

No tax will be levied on investment yields for the time being. The actual tax burden for receiving pension benefits will be lowered from the previous 7.5 percent to 3 percent. This policy will be applied retroactively to January 1 this year.

“The policy support we introduced this time will deliver sizable benefits. In the process of implementation, we need to gradually fine-tune the policies and sum up experience before applying such policies more broadly,” Premier Li said.

The meeting also decided to temporarily defer payments of certain government-levied charges and deposits to further ease the burden on market entities and help them overcome difficulties.

“Market entities, especially micro, small and medium-sized enterprises, self-employed households and manufacturing firms now face considerable difficulties. Postponing the collection of government-levied charges and deposits is an important step to support market players. All policies must be delivered on the ground without delay,” Premier Li said.

The meeting rolled out an additional set of fee deferral policies for the fourth quarter. Payments of 14 government-levied charges, including farmland reclamation fee and sewage and household waste disposal fee, amounting to over 53 billion yuan, will be deferred without overdue fines.

Localities will be encouraged to postpone the collection of sub-national government-levied charges on enterprises, and arbitrary charges will be strictly prohibited.

Payments of project quality deposits of various kinds, amounting to about 63 billion yuan, will be deferred. Due responsibilities must be fulfilled, and promises delivered with concrete actions to ensure that market entities truly benefit from the policies.

“Relevant institutions and mechanisms of charge levying should be refined to foster a world-class and market-oriented business environment governed by a sound legal framework,” Premier Li said.

The meeting also decided on measures to make more government services inter-provincially accessible to further unlock market vitality and bring greater convenience to the people.

On top of the 187 government services already inter-provincially accessible, additional 22 high-demand items that affect a wide range of sectors will be added to the list to address the pressing concerns of households and businesses.

Inter-agency information sharing will be enhanced and operational standards aligned to make more inter-provincial services available online and processed on a one-stop basis. The needs of senior citizens for in-person services will also be well met. Personal privacy and trade secrets will be protected pursuant to law.


Source : The State Council

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