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Issue 06, 2003 (01 June)
 Leader

Tax Breaks

Beijing Unveils Relief for SARS-Battered Economy


The Beijing government has recently unveiled a package of measures to bail out the SARS-battered economy. The measures, effective between 1 May and 30 September 2003, include:
  1. Enterprises in the retail, catering, hotel, tourism and entertainment sectors that are unable to pay social security fees in full are allowed to defer payment for five months with the approval of the municipal, district or county labour and social security departments.

  2. If state-owned and collective enterprises in the retail, catering, hotel, tourism, construction and entertainment sectors have difficulty paying wages to their staff, the administrative departments in charge will verify the number of people affected and the finance and labour and social security departments at corresponding levels will extend loans to the enterprises to pay their workers at Rmb290 a month per head as basic living expenses.

  3. Businesses renting premises owned by municipal, district or county governments that have to close down or suspend operation because of SARS are entitled to a 50% reduction in rental. Commercial, services, catering and entertainment operations experiencing difficulties because of SARS are entitled to a 30% reduction in rental, but 20% for those paying public enterprise standard rental.

  4. Body temperature scanners are supplied to large commercial enterprises and inter-province coach terminals.

  5. Continuous efforts will be made to pool funds to ensure the smooth implementation of major modern manufacturing projects approved by the municipal government.

  6. Greater support will be given to enterprises to expand their exports. Export and processing trade enterprises will be given Rmb0.01 in subsidy for every US$1 in exports in 2003. Subsidy for software exports will be Rmb0.03 to each US dollar.

  7. The retail, catering, tourism, entertainment and public transport sectors will be given priority in the offer of guarantee for policy working capital loans or long-term loans and will be offered a 50% reduction in guarantee money.

  8. Expenses incurred in the development of new technologies, new products and new processes for the prevention and control of SARS and the purchase of essential equipment and testing instruments may be included one-off in the cost of production.

  9. Municipal, district or county tourism enterprises that borrow short-term bank loans to tide over difficulties in the payment of wages, purchase of protective supplies and anti-epidemic expenses will be offered interest subsidy by the finance department at the corresponding level for a period of five months.

Tax Exemption for Anti-SARS Donations from Abroad

The General Administration of Customs (GAC) recently announced import tax exemptions for relief materials donated for the fight against SARS. The following are the new provisions:

  1. For relief materials donated by foreign governments and international organisations, importers must complete tax exemption formalities at the local customs by presenting the relevant donation documents (including the import checklist and distribution checklist) in accordance with the relevant provisions of the Regulations on Import and Export Tariffs of the PRC.

  2. For other donations, the following provisions apply:

    (1)   In accordance with the Circular of the GAC on Interim Provisions for the Exemption of Import Tax on Relief Donations and the Rules of the GAC for the Implementation of the Interim Provisions for the Exemption of Import Tax on Poverty-Relief and Charity Donations, the Ministry of Health, Ministry of Civil Affairs, Red Cross Society of China, All-China Women's Federation, China Charity Council, and provincial, municipal and autonomous region governments are responsible for accepting donations of medicines, protective items, diagnostic devices, and treatment and monitoring equipment for the fight against SARS. Importers must complete tax exemption formalities at the local customs by presenting the relevant documents (including the import checklist and distribution checklist).

    (2)   For ambulances, epidemic prevention vehicles and sterilising vehicles to be directly used for the prevention and control of SARS, the Ministry of Health, Ministry of Civil Affairs, Red Cross Society of China and China Charity Council can apply to GAC for tariff exemption upon approval by GAC and Ministry of Finance.