At the recent executive meeting of the State Council, China announced that it will introduce a series of relief measures for industrial and service sectors, to promote the steady growth of industrial sectors and the development of service sectors in special difficulty due to the COVID-19. Those measures include:

1. More income tax relief will be granted to industrial and service sectors. Micro, small, and medium-sized enterprises (MSMEs) that purchase new equipment worth RMB5 million or more and with a 3-year depreciation period are entitled to a one-off deduction of total purchase costs from taxable income, or a 50% deduction for such purchases of equipment with a depreciation period of 4, 5 or 10 years.
   
   
2. Tax deferral policies for MSMEs in the manufacturing sector will be extended. The coverage of the policy to reduce or waive six local taxes and two fees (namely, resource tax, urban maintenance and construction tax, real-estate tax, urban land use tax, stamp tax and tax of farmland used for non-agricultural purposes, education surcharge and local education surcharge) will be expanded to include all low-profit small businesses and individual industrial and commercial households.
   
   
3. Guidance will be provided to strengthen financial services. The People's Bank of China will provide incentive funds to support the increase of inclusive loans to small and micro businesses, to promote the rapid growth of medium and long-term loans in the manufacturing sector, and facilitate a steady decline of comprehensive financing costs of enterprises.
   
   
4. Industrial and supply chains in the manufacturing sector will be strengthened and weak links shored up. Rebuilding of industrial foundation will be taken forward. Efforts will be accelerated to develop new infrastructure and upgrade energy-saving and low-carbon technologies in key areas, which will boost effective investment.
   
   
5. For catering, retail, tourism, passenger transportation and other sectors with special difficulties, support will be scaled up including temporary tax relief and partial deferral of social insurance contributions in order to promote stable employment and consumption recovery.
   
   
6. Public transportation services such as bus, long-distance passenger transportation, ferry and taxi will be exempted from value-added tax in 2022. The temporary refund of quality guarantee deposit for tourism services at the rate of 80% will stay effective.
   
   
7. For micro and small enterprises and individual industrial and commercial households in the service sector renting state-owned property, 6 months of their rentals will be waived for those in areas classified as high or medium-COVID-risk areas in 2022, and 3 months of such rentals will be waived for those in other areas.
   
   
8. Localities may provide appropriate assistance to micro and small enterprises in the service sector and individual industrial and commercial households renting non-state-owned property and reduce or exempt property tax and urban land use tax in 2022 for property owners who cut or waive rentals.

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