24th March 2023 – (Beijing) China’s cabinet meeting chaired by Premier Li Qiang on Friday, 24th March, announced the extension of some preferential tax policies and the continuation of zero tariffs on coal imports until the end of this year. This move aims to boost the country’s economic recovery from the impacts of the COVID-19 pandemic.
China had cut tariffs on coal to zero in April last year due to concerns over domestic energy security and supply disruptions. As a result, the country’s coal imports in the first two months of this year surged 71 per cent from the same period last year. Utilities increased purchases of cheap thermal coal from Indonesia, while arrivals from Mongolia also picked up after the easing of COVID-19 restrictions.
China’s state media CCTV reported that the extension of zero tariffs on coal imports until the end of this year is to ensure a stable supply of energy for the country’s economic growth. This move will benefit coal-producing countries, particularly Indonesia and Mongolia, which have been significant suppliers of thermal coal to China.
China’s cabinet meeting also announced the extension of favourable policies for small companies and individual businesses. This extension of tax cuts will run until the end of 2024, according to the state media.
Other preferential tax policies include a reduction in tax related to research and development, and a halving of logistics companies’ tax on warehouse land for bulk commodity storage in urban areas. The total burden of these cuts is expected to reduce by more than 480 billion yuan (US$69.8 billion) annually, said CCTV.
Last year, China implemented tax and fee cuts, tax refunds, and deferred payments that amounted to 4.2 trillion yuan, according to the finance ministry. These measures aimed to mitigate the economic impacts of the COVID-19 pandemic, particularly for private businesses that were hit hard by stringent lockdowns and curbs.
Among these measures, the largest in recent years was the 2.4 trillion yuan in VAT tax rebates. With the extension of preferential tax policies and zero tariffs on coal imports, China aims to support its economic recovery further.