China will further ease the tax burden on businesses and individuals, as part of a broader push to boost consumption and support economic growth.
The structure of value-added tax will be simplified, from four brackets to three, and the rate for products including natural gas and agricultural items will be cut to 11 percent from 13 percent starting July 1, officials at a State Council meeting led by Premier Li Keqiang decided Wednesday, according to a statement.
The meeting also decided to allow individuals who have purchased commercial health insurance to exempt as much as 2,400 yuan ($349) from personal income tax every year, and passed tax-break measures for small companies with annual taxable revenue of no more than 500,000 yuan.
The cuts complement measures announced in the first quarter, and taken together the changes should ease the tax burden on Chinese businesses and citizens by about 380 billion yuan this year, according to the statement.
The measures “strengthen the good momentum of economic stabilisation and facilitate restructuring and upgrading,” according to the statement. China announced the biggest nationwide tax overhaul in two decades last year, to reduce the burden on services companies and encourage factories to innovate.