China is implementing more than 460 billion yuan ($72.2 billion) in tax cuts annually, potentially to ease the impact of US trade restrictions on Chinese businesses, particularly in manufacturing and technology, Nikkei reported. Value-added taxes were lowered this month to 16% from 17% for the sale of goods, and to 10% from 11% for transportation, logistics and construction services. The 6% VAT for financial and consumer services remains unchanged. The new rates will save manufacturers alone more than 100 billion yuan, with much of the benefits going to the automotive and electronics sectors, according to calculations by Zhongtai Securities. The government also decided in late April to broaden qualification criteria for the preferential 3% VAT rate applied to smaller businesses and startups. Tech companies, in particular, are enjoying an even bigger boost. They will be paid back for any excess taxes they have paid, which could be spent on research and development and capital investment.
