Taxation officials introduce tax refund policy at a small company in Cangzhou, Hebei province. FU XINCHUN/FOR CHINA DAILY
China's continued tax and fee cuts and the recent move of refunding value-added tax credits to businesses are helping market players withstand economic headwinds and are critical in supporting growth been announced early in March, and have been swiftly implemented so far, despite growth headwinds. This not only alleviates liquidity crunches for smaller businesses, but more importantly, boosts their confidence and builds up better prospects for the latter half of the year," Su said.
Survey results made by the State Taxation Administration show that funds under the VAT tax credit refund scheme are mainly used for product expansion, purchasing raw materials, payrolls and technological research.
Hao Aixiu, representative of a pharmaceutical production company in Henan province, said recently that the firm received some 1.24 million yuan in tax refunds from the local taxation department. The company received the refunds only a couple of hours after its refund applications were filed.
"We've been facing increasing challenges in the past two years, as prices of raw materials keep ticking up, while production and logistics were frequently distorted by the pandemic situation," she said. "Liquidity from the tax refund scheme is critical for underpinning operations and consolidating our market distribution channels."