“Pushing through further tax cuts will effectively promote the economy,” Premier Li Keqiang said in a statement.
China’s tax cuts this year are part of larger efforts to manage slower growth in the world’s second-largest economy. Beijing is working to maneuver a delicate transition away from the old model of manufacturing-led growth, to one powered by consumption and services. Although growth grew faster than expected at 6.9 percent in the first quarter, experts have warned of a slowdown in the second half of the year.
The tax cuts were announced Wednesday after a meeting of China’s State Council, led by Li. Together with measures announced earlier this year, the government estimates the cuts will lower the tax burden on Chinese companies and individuals by about 380 billion yuan this year.
Last year, China started its biggest tax overhaul in two decades as part of larger plans to lower the tax burden on services companies and to boost the overall economy.