Though the tax burden and social security contributions are reduced by the equivalent of almost 299 billion Swiss francs (two trillion Yuan), not attributed to the Minister of Finance Liu Kun, but with too big holes in the state Treasury. At a press conference at the annual session of the national people’s Congress, he acknowledged on Thursday in Beijing “challenges for the budget”, but stressed: “We have different sources of income.”
The budget deficit will rise this year by only 2.6 per cent to 2.8 per cent in comparison to economic output – is below the international threshold. “Compared to other countries, our ratio between deficit and economic performance is not particularly high,” said Liu Kun. Given the trade war with the United States and the high indebtedness of the municipalities and companies, the Chinese government now only expects a growth of 6.0 to 6.5 percent – the lowest for almost three decades.
in Order to bring the second-largest economy moving again and creating enough jobs, are to be relieved, especially small and medium-sized enterprises. The private sector contributes particularly in China, for growth in employment. To help businesses will be reduced, among other things, the highest rate of VAT from 16 to 13 percent. Also, the rate of 10 per cent in different areas of the industry will be reduced to 9 percent. In addition, there is a reduction in the income tax.
The government is aware that the pressure on the households in the country increases significantly. “Authorities at all levels need to find their belt-tightening and effective methods to draw funds,” the report of the head of government Li Keqiang, the nearly 3,000 delegates of the people’s Congress to study on their ten-day session. This Chinese Version of a Parliament is not elected freely and, above all, the vicarious agent of the ruling Communist party.
While the expenditure in the new budget increase by a total of 6.5 percent, the military with 7.5 per cent, again significantly more. The session of Congress ends next Friday with the adoption of the work reports of the government and the budget. (SDA)