The China Tax Policy Review and Outlook is a series of annual publications designed by PwC’s China National Tax Policy Services to review key tax policy developments in China and discuss the trends as well as its impacts on Chinese enterprises from a forward-looking perspective. This 2018 China Tax Policy Review and 2019 Outlook is the fourth issue in the series.
2018 is a crucial year for implementing the 13th Five-Year Plan, marks the 40th anniversary of China’s reform and opening-up. Since the financial crisis in 2008, the global economy has been reviving for a period of time, but the trend of economic recovery has gradually slowed down in recent years. In order to realise steady growth in the domestic economy, China has continued to deepen the supply-side structural reform and advance the development of “Made in China” high quality transformation. At the same time, China has been transforming its role as the “world’s factory” to the “world’s market.” As an important driver to China’s economic growth, the private economy has also gained a lot of attention and support in the past year. During the year, the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) introduced a series of tax policies and reform measures on tax reduction, opening up, business environment improvement, and reform of taxation system as well as tax collection and administration system, while at the same time, process to enact relevant tax legislation are also being speed up.
Some highlights from the 2018 China Tax Policy Review and 2019 Outlook:
Farewell to 2018 and embrace 2019. The head of SAT mentioned, in his New Year Speech, that in 2019 further measures would be taken to deepen the reform of the tax regime, consolidate the achievements gained from the reform of the state and local tax collection and administration system, seriously implement the various tax reduction initiatives, continue to deepen the reform of “streamlined administration, delegated powers, improved regulations services”, and improve the tax and business environment. We believe China will continue with its fiscal and tax reform and focus on fiscal and tax policies to promote economic development in 2019. For taxpayers, various tax reforms in the coming year are worth looking forward to, such as deepening of the VAT reform, adjustment of social contribution rates, as well as the enactment of various tax laws, etc.