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Business / 2016 Top 10

Steps taken by State Council to reduce taxes and fees

By Yu Xiaoming (chinadaily.com.cn) Updated: 2016-08-05 07:00

2. Reducing rate of pension and housing provident funds

Steps taken by State Council to reduce taxes and fees

A bank clerk shows a social security card at a branch of China Construction Bank (CCB) in Haian county, Nantong city, East China's Jiangsu province, 30 October 2014.[Photo/IC]

According to a government routine meeting held on April 13, the required contribution rates of the pension insurance, unemployment insurance and housing provident funds will be lowered in a two-year period starting May 1.

Under the policy, enterprises that contribute more than 20 percent of the pension insurance payment can reduce the rate to 20 percent, while those in provinces that see sufficient funds can lower the rate to 19 percent. In addition, the rate of the unemployment insurance will range between 1 percent and 1.5 percent, down from the previous 2 percent.

The new policy's biggest effect is to relieve the burden on businesses. The Ministry of Human Resources and Social Security estimated it will save businesses 38.6 billion yuan a year, if the measures are put in place.

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