Science and Technology Daily:

The CPC Central Committee and the State Council have attached great importance to technological innovation. Could you please share the main measures and achievements of the tax department in supporting innovation in recent years? Also, what are your plans to further promote technological innovation in the future? Thank you.

Luo Tianshu:

Thank you for your question. In line with the decisions and plans of the CPC Central Committee and the State Council, tax and fee support policies have been consistently broadening and deepening in their scope to provide better support for technological innovation and development throughout the entire innovation chain and various links. From 2018 to 2022, the average annual increase in tax and fee reductions and exemptions to support scientific and technological innovation reached 28.8%. By 2022, the annual burden reduction scale had reached 1.3 trillion yuan, effectively stimulating the momentum of social innovation and development. I would like to share three aspects of our progress using big data on tax. Firstly, we have invested more in innovation funds. From 2018 to 2022, enterprises' investment in R&D expenses has increased by an average of 25.1% per year. Enterprises are purchasing R&D equipment to enhance their hardware power and buying technical services to increase their software power. The average annual growth rate for purchasing R&D equipment and technical services was 11.5% and 18.3%, respectively. Secondly, the vitality of innovation subjects is stronger. Over the past five years, the number of tax-related business entities in high-tech industries has grown at an average annual rate of 9.1%. This growth rate remains higher than the average growth rate of all tax-related business entities, given that high-tech enterprises have relatively high establishment conditions. Thirdly, the momentum of innovation and development is even stronger. In the past five years, the sales revenue of the high-tech industry has grown at an average annual rate of 16.1%, which is 5.5 percentage points higher than the average growth rate of the entire industry. 

Next, the tax departments will play an important role in taxation functions and continue to excel in four aspects: First, we will support both basic research and application innovation by providing tax incentives for enterprises to invest in basic research and promoting the commercialization of scientific and technological achievements. We will encourage more innovative results and better commercialization of innovative achievements. Second, we will support both the cultivation and growth of emerging industries and the transformation and upgrading of traditional industries. We will further develop preferential tax policies to support the development of emerging industries such as new-generation information technology and new energy vehicles. We will conscientiously implement the institutional arrangement that has been clarified to increase the proportion of R&D expenses deducted from 75% to 100%, to further promote the accelerated transformation and upgrading of traditional industries. Third, we will support startup enterprises to operate with agility and mature enterprises to excel in technology research breakthroughs. We will implement preferential tax policies to encourage venture capital enterprises and entrepreneurship platforms like technology enterprise incubators and help startups grow better. We will further implement preferential income tax policies for high-tech enterprises and encourage mature innovative enterprises to continuously grow and strengthen. Fourth, we will support accumulating "things" and aggregating "people" into innovative elements. On the one hand, policies such as accelerating the depreciation of fixed assets should be implemented to support upgrading and replacing enterprise equipment. On the other hand, individual income tax incentives will be given to enterprises' scientific and technological personnel who obtain equity and those research personnel in universities and colleges receiving rewards for the job-related commercialization of scientific and technological achievements. This will enhance the enthusiasm and creativity of research backbones in various aspects and promote the better conversion of "soft power" into "concrete achievements." Thank you.