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Speakers:

Mr. Wang Jun, commissioner of the State Taxation Administration (STA)

Mr. Wang Daoshu, deputy commissioner of the STA

Mr. Luo Tianshu, chief accountant of the STA

Mr. Cai Zili, chief auditor of the STA

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

April 6, 2023

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). This is the 12th briefing in the series "Embarking on the New Journey — A Government Perspective." Today, we have invited Mr. Wang Jun, commissioner of the State Taxation Administration (STA), to brief you on better harnessing taxation to deliver high-quality economic and social development, and to take your questions. Also joining us today are Mr. Wang Daoshu, deputy commissioner of the STA; Mr. Luo Tianshu, chief accountant of the STA; and Mr. Cai Zili, chief auditor of the STA.

Now, I'll give the floor to Mr. Wang Jun for a brief introduction.

Wang Jun:

Friends from the media, ladies and gentlemen, good morning. It is my pleasure to meet you at this press conference and respond to your concerns. For years, journalist friends and people from all sectors of society have given their full support and understanding to the taxation work and tax authorities. On behalf of the STA and my three colleagues here today, I would like to take this opportunity to express my heartfelt gratitude to you all. Thank you.

Since this year, faced with a complex global environment and challenging domestic reform and development tasks, the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core has united and led the Chinese people of all ethnic groups, efficiently balanced both the international and domestic situations, and strived to achieve an overall improvement in economic performance. As a result, China's economy has got off to a relatively rosy start. Taxation is a barometer of the economy. Business production is followed by sales, and sales cannot be completed without issuing invoices. By taking advantage of value-added tax (VAT) invoices and other taxation-related big data, which are immediate, broad-based and detailed, the tax authorities can depict and compare the macroeconomic trends in a timely, objective and relatively comprehensive manner. This graph shows the changes in the sales revenue of enterprises across the country from January 2022 to April 5, 2023.

As shown by the curved line on the graph, in the past 15 months, the growth rate of sales revenue of enterprises across the country makes two V shapes, which together form a W shape. The first V-shaped curve started from the high growth rate of 6.6% in the January-February period last year. Then, the growth rate began to drop month by month to a low of -7.4% in April, and returned to a relatively high level of 7.5% in June. The second V-shaped curve started last July, slowly fluctuated and declined to a low of -3.1% in December, which was also the second-lowest growth rate last year. With the swift and smooth transition of the COVID-19 response measures and macroeconomic policies taking effect, the growth rate of business sales revenue has been picking up this year. The growth rate in the first quarter rose by 4.7% year on year and increased by 6.2 percentage points compared with the fourth quarter of last year. The growth rate also increased month by month, and the figure achieved a year-on-year increase of 12.8% this March.

Taxation-related big data also shows the growing confidence of businesses in production and operation going forward. In March, the value of business purchases increased 14.1% year on year, which was 12.8 percentage points higher than in January-February. The figure from April 1-5 saw a year-on-year increase of 23.8%. More purchases will translate into more sales. Given the low level last April and the continuing effects of the series of macroeconomic policies this year, we are certain that business sales revenue in April will see an even higher year-on-year increase than March. Business sales revenue from April 1-5 also reached a high level, up 21.2% year on year. In short, during the first year of the implementation of the guiding principles of the 20th CPC National Congress, China's economy has seen sound growth momentum overall in the first quarter. Such momentum was maintained on a month by month basis, and continues to improve.

The 20th CPC National Congress drew up a grand blueprint for advancing the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. Important arrangements were made at the Central Economic Work Conference and the NPC and CPPCC Sessions, and by the new-term State Council for promoting China's economic and social development. All these facts have placed new and higher requirements on tax reform and development. Taxation authorities must further strengthen their political stance and keep in the right direction in their work. We will strive to be a pragmatic doer and a solid contributor to implementing the decisions of the CPC Central Committee and the State Council, also a servant, a publicist, and a close friend of the tax and fee payers. We will give better play to and expand the role of taxation, lay a solid foundation for promoting all taxation-related work from a new starting point, and better serve Chinese modernization through taxation modernization.

First, we will continue to intensify self-improvement efforts to ensure that taxation organs are first political organs. At any time, taxation authorities should take immediate action in accordance with the arrangements made by the CPC Central Committee. We will launch activities under the theme of studying and putting into practice Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and follow the general principle of "studying the Thought, strengthening Party spirit, prioritizing practice, and making new contributions." By studying profoundly, understanding thoroughly, and doing investigation and research carefully, we will strive to assume responsibilities and do solid work. By doing so, we will constantly break new ground in the self-improvement of the taxation system as a political organ, make new achievements in all taxation-related work, and oversee that taxation officials take new steps to perform their duties.

Second, we will focus on the primary task of serving high-quality development. High-quality development is the top priority in building China into a modern socialist country in all respects and also the primary responsibility of taxation authorities in serving matters of national significance. All taxation-related work should focus on and make a contribution to this priority. We will continue to collect taxes in accordance with laws and regulations and stick to the bottom line of no tax or fee not prescribed by law so as to create a solid financial foundation for achieving high-quality development. We will proactively study and fully implement all preferential tax and fee policies so as to speed up economic growth and unleash market vitality for achieving high-quality development. We will also constantly adopt measures to innovate our services and enhance targeted regulation to ensure that taxation authorities always respond to people's concerns, meet people's needs, and strive for people's aspirations so as to foster a favorable tax and business environment for high-quality development. 

Third, we will deepen reform, promote innovation, perform our duties in a creative way, and improve our efficacy. We will earnestly implement the requirement of the CPC Central Committee to engage in extensive research and fact-finding activities and carry out the arrangements set by the new-term State Council. By switching roles and putting ourselves in others' positions, we will work to understand the realities, take specific steps, and deliver solid outcomes. Focusing on hands-on experience, wholehearted services, solid progress, and effective reforms, we will guide taxation officials to perform their duties and ensure implementation in a creative way and strengthen the role of taxation as the foundation, pillar, and guarantee of the country's governance.

Next, my colleagues and I are happy to answer your questions. Thank you.

Xing Huina:

Now you are welcome to ask questions. Please identify the media outlet you represent before raising your questions. 

CCTV:

Mr. Wang just mentioned that the tax data reflects a better start to China's economic development so far this year. Can you tell us more about that? Thank you.

Wang Jun:

Thank you for your follow-up questions. I understand that you are trying to further understand some of the specifics of the economic operation in the first quarter of this year. Here I will try to use "six gradual upturns" to elaborate.

The first gradual upturn is that economic operations are gradually rebounding. Just now, I have briefly introduced the overall operating situation, which I will now subdivide by industry to provide a more detailed breakdown. In March, 79.7% of the national economy's 473 medium-class industries and 75.8% of its 1,382 small-class industries achieved positive growth, while the proportion in January and February was about 56%. Between April 1-5, the proportion of medium-class and small-class industries that achieved positive growth increased to 86.9% and 82.3%, respectively. I cite this specific example and list these specific numbers to tell you that the proportion right now is close to what it was in 2019 before the epidemic.

The second gradual upturn is that business entities are becoming gradually active. First, the number of new taxpaying business entities is gradually increasing. In the first quarter, their number hit 3.434 million, up 7.2% year on year, 8 percentage points higher compared with the full-year growth of last year. Second, business entities whose production and operation were hard hit by the epidemic are regaining vitality at a faster speed. In March, the number of taxpaying business entities that received invoices and had income declarations increased by 2.08 million and 3.12 million, respectively, compared with February and January.

The third gradual upturn is that industrial production is gradually recovering. In March, industrial enterprises' sales revenue grew 7% year on year, 1.2 percentage points higher compared with annual rate of last year. The year-on-year growth for manufacturers of intelligent consumption equipment and manufacturers of communications equipment reached 36.4% and 12%, respectively. Given the continual decline in the year-on-year growth of PPI, the increase in sales revenue was hard-won. In addition, in March, the amount of money spent on purchasing machinery and equipment by the manufacturing industry increased by 13.5% year on year, 7.1 percentage points higher than the full-year rate of 2022, which reflects the increasing willingness of enterprises to expand production and upgrade equipment.

The fourth gradual upturn is that consumer demand is gradually expanding. In the first quarter, catering and accommodation; culture, sports and entertainment; and residential services, among other contact-based service industries, notably rebounded, registering sales revenue growth of 22.8%, 13.7%, and 9.4% respectively year on year. The growth rates were 22.7, 17.6, and 6.5 percentage points higher compared with the annual growth of last year and exceeded the pre-epidemic 2019 level. Commodity retailing recovered steadily and faster, with sales revenue increasing by 11.6% year on year, 3.4 percentage points higher compared with the whole of last year. It is worth mentioning that housing consumption showed signs of rebounding, and the sales revenue growth of real estate reentered the positive territory in January and February, up 2.3% year on year, 19.5 percentage points higher than the annual growth of 2022. In March, the year-on-year growth further increased to 17.9%.

The fifth gradual upturn is that the innovation momentum is being gradually enhanced. In March, the high-tech industry sales revenue grew 15.6% year on year, 5.7 percentage points higher than the full-year growth of 2022. The growth rates for such high-tech services as services for applying sci-tech advances and information services were relatively faster, up 45.5% and 19.8% year on year, respectively. In March, core industries of the digital economy grew 14.1% year on year, 7.3 percentage points faster than that of last year. Among them, the digital factor-driven industry and digital technology application industry grew faster, up 24.5% and 19.8% year on year, respectively.

The sixth gradual upturn is that green development is getting gradually boosted. In the first quarter, sales revenue of the ecological protection and environmental governance industry increased by 18.1% year on year, while that of power generation based on wind energy, solar energy, and other clean energy increased by 21.8% year on year, both maintaining a high growth rate, significantly faster than the overall national level. In particular, the sales revenue of the new energy vehicle manufacturing industry maintained good growth momentum, rising 35.2% year on year in the first quarter, after an already high year-on-year growth of 111.5% in the first quarter of 2022. 

Of course, while acknowledging that overall economic performance is moving in a positive direction, month by month, and will get better in the next step, we must also be keenly aware that there are still many uncertain and unstable factors at home and abroad. The internal driving force for high-quality development needs to be further strengthened. Although economic development faces various problems and difficulties, we are confident we will meet this year's economic growth target of around 5%. However, we need to work hard. Thank you.

China Daily:

The 20th CPC National Congress proposed insisting on focusing on the real economy in terms of economic development and moving faster to boost China's strength in manufacturing. What has been the effect of preferential tax policies on the development of the manufacturing sector in recent years, and how will tax support help the manufacturing sector become stronger in the future? Thank you.

Cai Zili:

Thank you for your questions. Manufacturing is the foundation of the real economy and the lifeline of the Chinese economy. In recent years, the CPC Central Committee and the State Council have planned and implemented a series of tax refund and fee reduction measures, and the manufacturing sector has been the top priority for support. In particular, a series of major measures to ease the heavy burden of the manufacturing sector has been successfully launched. These measures include lowering the VAT rate in the manufacturing sector and other fields, taking the lead in increasing the tax deduction ratio for manufacturing R&D expenses and making greater efforts to increase VAT credit refunds in manufacturing. These measures have effectively supported the manufacturing sector in reducing operating pressure, enhancing innovation motivation, and unlocking development potential.

Data shows that tax support aimed at improving the manufacturing sector is quite strong. First, the scale of tax and fee reductions is the largest. Since 2018, the manufacturing sector has benefited the most, with a total of more than 3.5 trillion yuan in tax and fee reductions, and tax refunds and fee deferrals, meaning the manufacturing sector has enjoyed the most tax and fee cuts. Second, the tax burden has dropped the most. Tax and fee reduction policies have significantly reduced the tax burden on business operations. According to the data of key tax source enterprises monitored by the STA, the tax burden of manufacturing enterprises in 2022 decreased by 23.3% compared with 2017, and equipment manufacturing sector dropped by 29.5%, which is the largest decrease in taxes. Third, the boosting effect is more prominent. Under the joint effect of a series of tax and other supporting policies, the development of China's manufacturing industry has grown steadily. Tax data shows that from 2018 to 2022, manufacturing enterprises increased their sales revenue by an average of 9.4% annually. Of this, sales revenue of equipment manufacturing increased by an average of 10.3% annually. Purchases of smart, R&D and energy-saving equipment by the manufacturing sector increased by an average of 13.5% annually. In 2022, the added value of the national manufacturing industry accounted for 27.7% of GDP, an increase of 1.4 percentage points from 2020, showing continued momentum with steady progress and quality improvement.

Going forward, we will fully implement and constantly refine tax-and-fee policies in accordance with the plans and deployments of the CPC Central Committee and the State Council, further assist the high-quality development of the manufacturing sector, and strive to foster an enabling environment that is conducive to the development of advanced manufacturing. First, we ought to support manufacturing to become higher-end. We will promote the upgrading of manufacturing to become higher-end through the implementation and improvement of supporting policies such as preferential tax policies for high-tech enterprises and accelerated depreciation of newly purchased fixed assets in key manufacturing industries. Second, we need to help manufacturing become smarter. We will better leverage the role of policies of the additional tax deduction for R&D expenses and preferential tax policies for technology transfer, speed up the digital transformation of the manufacturing sector, realize the deep integration of digital technology, production, and business operations, and continuously improve the level of intelligence. Third, we need to guide manufacturing to become more eco-friendly. We will implement tax-and-fee policies such as corporate income tax exemptions for special equipment investment in environmental protection, energy and water conservation, and the comprehensive use of resources, etc., encourage manufacturing companies to reduce pollution and carbon emissions and become more eco-friendly, and further promote the green, low-carbon and high-quality development of China's manufacturing sector. Thank you.

Yicai.com:

The intensity and effectiveness of this year's proactive fiscal policy will be increased. Can you introduce the preferential tax and fee policies that have been rolled out this year, and what kind of measures are worth looking forward to in the future? Thanks.  

Wang Daoshu:

Thank you for your concern. Preferential tax and fee policies are an important part of a proactive fiscal policy. Since the beginning of this year, in accordance with the plans of the CPC Central Committee and the State Council, fiscal and tax departments have released two batches of preferential tax and fee policies that have been extended or optimized. As a result, an additional 1.2 trillion yuan in tax and fees is expected to be reduced this year. Adding to that, the continued policy of refunding end-of-tax-period VAT credit is expected to reduce more than 1.8 trillion yuan in tax and fee for business entities throughout the year. Overall, these preferential tax and fee policies have the following three characteristics: First, their continuity has been highlighted. A batch of effective policies with high social expectations has been continued to keep certain social expectations stable, such as the halving of urban land-use tax for logistics enterprises' use of land to store bulk commodities and reducing employment security funds for people with disabilities. Second, precision has been improved through policy optimization. We optimized and implemented a series of policies to help micro and small-business entities overcome difficulties and achieve development, such as by reducing VAT payments for small-scale taxpayers and income tax for micro and small enterprises and self-employed individuals, with a focus on the latter two. Third, innovation in institutions has been promoted. We continued additional tax deductions for R&D expenses and increased this deduction from 75% to cover 100% of such expenses for enterprises. This policy will be implemented in the long run to provide institutional support for creating a better tax system, further inspiring enterprises to pour efforts into innovation. Meanwhile, some temporary arrangements and policies have been phased out in an orderly manner after their expected effects were produced, which will not only promote the standardization of the tax and fee policy system but also reinforce the foundation of the tax system that is conducive to fair competition.  

Next, we will continue thoroughly implementing the decisions and plans of the CPC Central Committee and the State Council, making great efforts in four aspects. First, we will intensify efforts to deliver. Each April is an important period for enterprises to declare and pay their taxes and fees. We are seizing this important window of opportunity to roll out a series of new service measures, further strengthen targeted delivery of policies, refine the implementation of policies, and optimize tax handling functions, to see that taxpayers and fee payers know the policies, understand the operations, and can enjoy the benefits. Second, we will follow through and evaluate the effects of preferential tax and fee policies. The implementation of preferential policies has been included as an important part of our efforts to carry out in-depth research and studies. We are working hard to evaluate and analyze the effects of these policies, to deliver tax and fee policies' dividends to the public, and to promote better and tangible results in policy implementation. Third, we will continue to optimize our policies. We are running a campaign for a more coordinated system with fast responses to different problems. In response to the difficulties and problems encountered during policy implementation, prompt actions will be taken to resolve them and facilitate the swift and direct delivery of policy dividends to the public. Fourth, we will strengthen our reserve of policy options. We will coordinate with related departments to pay close attention to changes to economic performance, design better services to build up China's strength in manufacturing, accelerate the implementation of the innovation-driven development strategy, and strengthen our reserve of tax and fee policy options to enrich our policy toolbox, so as to better drive high-quality economic development.  

National Business Daily:

The CPC Central Committee and the State Council place great importance on the development of the private sector. My question is, what factors do the tax authorities weigh up when trying to encourage and support the development of this sector? Thanks. 

Wang Jun:

Thank you for your question. General Secretary Xi Jinping noted that private enterprises and private entrepreneurs are in our ranks. As the head of the STA, my feeling is: they are family. Contributing more than 50% of tax revenue, the private sector is central to ensuring China's national strength. Therefore, our attitude to the private sector is consistent in three aspects.

First, in terms of policy implementation, private enterprises will always be treated impartially. Over the past five years, private enterprises have collectively enjoyed tax cuts, fee reductions, refunds, and deferred tax and fee payments of more than 8 trillion yuan, roughly 70% of the total. Notably, after the state introduced a series of tax and fee support policies, 80% of self-employed individuals in the private sector are no longer required to pay taxes. Going forward, we will continue to actively participate in and diligently implement various tax and fee support policies that benefit private enterprises, just as we have always done.

Second, regarding tax and fee services, we will always attach great importance to providing meticulous care to private enterprises. Approximately 80% of the national taxation departments' service resources are directed towards private enterprises. Additionally, roughly 80% of the current suite of tax and fee service measures are designed to benefit micro, small and medium-sized enterprises (MSMEs), as well as self-employed individuals, which constitute the majority of private enterprises. The STA has established a service office for micro and small enterprises under the tax service department and has collaborated with the All-China Federation of Industry and Commerce for two consecutive years to launch a special campaign aimed at assisting micro and small enterprises. This year, we will introduce a range of new service measures.

Third, we will consistently spare no effort to support private enterprises in terms of providing relief and addressing challenges. Over the past five years, we have actively deepened tax-bank cooperation to address the financing challenges faced by private enterprises. We have utilized corporate tax credit information as an important reference for financial institutions to provide loans to private enterprises, especially micro and small enterprises. This has helped them secure 22.46 million bank loans amounting to 6.22 trillion yuan. Currently and in the future, there may still be some challenges in the supply chain of the private enterprise industry. To address this, we are developing and continually improving the "National Taxpayer Supply Chain Query" platform and related services to assist private enterprises in expanding their supply-demand connections. This will help promote private enterprises to reinforce their weak links. Thank you. 

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.

Economic Daily:

At the 20th CPC National Congress, proposals were put forward to improve people's well-being and raise their quality of life. Could you please inform us about the practical measures taken by the tax authorities to ensure and improve people's livelihoods? Thank you.

Wang Daoshu:

Thank you for your question. General Secretary Xi Jinping has emphasized that "the people's desire for a better life is the goal we strive to realize."  The tax departments resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, adhered to the original mission of "gathering money for the country and collecting taxes for the people," and effectively organized tax revenue to provide solid financial support for safeguarding and improving people's livelihoods and implemented preferential tax policies to continuously release benefits for the people. Here, I will introduce the specific situation in three aspects:

First, we have been actively promoting employment as it is a major concern for people. Small and micro-business entities are the primary channels and driving forces for promoting employment and safeguarding people's livelihoods. In accordance with the arrangements of the CPC Central Committee and the State Council, tax departments have fully implemented preferential tax policies, such as VAT reductions and exemptions for small-scale taxpayers, preferential income tax for small and micro-profit enterprises and individual businesses, and halving of the "six taxes and two fees" for small and micro-business entities, to help stabilize employment and expand job opportunities. As a result, in 2022, these policies will benefit over 80 million business entities, with small and micro-enterprises and individual businesses enjoying beneficiary coverage rates exceeding 99%.

Second, we have focused on reducing burdens. The top concerns are education, healthcare, housing, and other key aspects of people's lives. The tax department has actively implemented preferential tax policies to alleviate the burden on people's livelihoods. Personal income tax reform, implemented in 2018, has yielded a significant tax reduction effect, benefiting workers in general. . In particular, the seven special additional deductions for child education, continuing education, housing loan interest, housing rent, serious illness medical treatment, elderly care, and care for infants under three years old have provided targeted tax relief, addressing livelihood concerns. According to the latest data from this year's personal income tax settlement in the first month, tax reductions through special additional deductions exceeded 150 billion yuan. Of this, taxpayers caring for children and the elderly have received a reduction of close to 110 billion yuan. Additionally, to support residents' reasonable housing needs, our country has continued to implement tax exemption policies for those buying their first house and the life-improving second house, as well as precise tax support policies for constructing and operating government-subsidized public rental housing. These two policies reduced taxes by over 200 billion yuan in 2022.

Third, we have enhanced social insurance services. Social insurance is the safety net for the people. Since the tax authorities began to take charge of levying social insurance premiums, the tax departments have extended their services to all units and the 1.3 billion-plus people covered by social insurance. We have actively optimized tax payment services and expanded their channels, ensuring the social insurance premium budget for years in a row while fully implementing the policies of reducing fees and postponing tax payments. In this way, the "pension money" and "life-saving money" of people can be guaranteed. At the same time, we have worked with relevant departments toward unified national management of basic old-age insurance funds, promoted provincial-level unified management of basic medical insurance, unemployment insurance, and work-related injury insurance; launched pilot programs on long-term care insurance and occupational injury insurance for people in new forms of employment ; and implemented tax support policies for enterprise annuities and individual pensions, further improving the world's largest social insurance system. 

People's livelihoods are no small matter, and we are concerned about each and every thing related to the people. Going forward, we will adhere to a people-centered philosophy of development, firmly fulfill the task of ensuring tax services and improving people's livelihoods, effectively consolidate the financial foundation, and earnestly implement tax and fee support policies so as to ensure tax contributions enhance people's livelihoods and wellbeing. Thank you. 

Wang Jun:

I would like to add one point: tax revenues are collected from, used for, and benefit the people. On March 30, we, along with the Ministry of Education and the Ministry of Justice, launched the 32nd Tax Publicity Month and a special activity of youth education on tax laws on campus. I noted that coverage of the event got lots of attention online. I will share one story about the event here. A student asked me why we publicized tax laws on campus. In response, I asked whether the sports facilities and the audio-visual equipment at their school were good or not, and the answer was yes. I asked whether they needed to pay tuition fees or textbook fees, and the answer was no. Then where did the money come from? I said that the money involved was collected in the form of tax from the student's, say, uncle, aunt, grandma, and grandpa, to develop and improve the compulsory education cause. Then I asked whether it was meaningful to publicize tax laws on campus so that everyone could abide by the laws to ensure tax collection for the sake of the country and the people, and the student gave a positive answer, which I was glad to hear. As you can see, providing for people's livelihoods is the basic responsibility of the tax departments. Thank you. 

The Beijing News:

Since last year, the tax departments have severely cracked down on tax-related legal violations and exposed some typical cases, drawing wide social attention. What are the plans going forward in this regard, and what are the specific arrangements for case exposure? Thank you. 

Luo Tianshu:

Thanks for your question. The tax departments have always focused on both constantly improving tax and fee services and strictly fighting against malicious legal violations such as tax evasion and fraud. Tax inspection departments nationwide investigated and punished 128,300 illegal taxpayers in accordance with the law in 2022, retrieving 195.5 billion yuan in tax losses of various kinds and publicly exposing nearly 900 typical tax-related cases of various types, strongly and effectively regulating the tax collection order. 

Looking ahead, the tax departments will follow the guidance of risk management based on precise and comprehensive analysis, combine punishment and clemency, and focus on improving the efficacy of regulation while ensuring deterrence through punishment. In this way, we aim to render tax law enforcement effective and mighty with a human touch and resolutely safeguard the national taxation security and the legitimate rights and interests of law-abiding enterprises. 

First, we will focus on tax-related risks and promote targeted governance in an orderly manner. We will continuously improve the dynamic supervision system of "credit plus risk." In terms of general tax-related legal violations, the tax departments will successively take five comprehensive steps. The first three are reminding and alerting, urging to rectify, and talking and admonishing, which will grant more taxpayers opportunities to rectify themselves and demonstrate the warmth and flexibility of tax law enforcement. Of course, for those who refuse to rectify or repeatedly break the laws, we will take the fourth step of filing an inspection case in accordance with the law. Regarding serious cases, we will take the last step, publicly exposing them to showcase the might and rigor of law enforcement. 

Second, we will closely monitor tax fraud through the use of falsified invoices and work together to enforce strict punishment. We will continue to collaborate with six departments, including the Ministry of Public Security, to crack down on serious illegal activities that do not create wealth for society and disrupt market order, such as issuing falsified invoices by "fake companies", receiving export rebates through "false exports" and taking advantage of tax concessions through "false declarations." We will strike a heavy blow to illegal activities as soon as they appear and continue to intensify our efforts to eradicate such activities.

Third, we will ensure the implementation of tax relief policies and conduct inspections to address problems promptly. The tax authorities will carry out special campaigns to ensure the implementation of multiple tax policies and crack down on tax-related intermediaries who engage in false advertising and malicious tax planning to firmly prevent the "red envelopes" of tax relief policies from falling into the hands of criminals. At the same time, we will investigate our own problems. Tax officials found to be derelict in their duties in tax evasion and fraud cases, especially those who collude internally and externally or engage in cheating, will be punished severely once discovered. We will also shore up the weak links in tax management after we find them through inspections and address both the symptoms and the root causes of the problems.

Today, the STA and tax authorities at the provincial and municipal level will also announce seven typical cases of tax-related violations. Please pay attention to them. Thank you.

China Securities Journal:

We all know that tax and fee revenue is the financial guarantee for national governance. Could you please tell us how the tax authorities organized tax and fee revenue in the first quarter and the situation going forward? Thank you.

Cai Zili:

Thank you. Organizing tax and fee revenue is the primary responsibility of the tax authorities. We have fully implemented the decisions and arrangements of the Central Committee of the CPC and the State Council, levied taxes and fees in line with laws and regulations, carried out the tax and fee preferential policies, and resolutely avoided collecting unwarranted taxes and fees. In the first quarter, tax authorities nationwide overcame the impact of the epidemic at the end of last year and early this year, along with a high base from the same period of the previous year and this year's continued implementation of tax reduction policies, and collected a total tax revenue (excluding export rebates) of 4.6756 trillion yuan, a year-on-year increase of 0.5%. This achievement marks a good start.

Mr. Wang Jun mentioned before that enterprise sales revenue increased by 4.7% year on year in the first quarter, which seems to be somewhat different from the growth rate of tax revenue. This is mainly because the tax declared by enterprises in the current month is the tax generated by their production and operation activities in the previous month. Therefore, the first quarter's tax revenue reflects economic activity of last December, and January and February of this year. In contrast, enterprises' sales revenue represents current production and operational activities, leading to a one-month difference between the two figures.

In the first quarter, tax revenue collected by tax authorities fell by 1.2% year on year in January, but increased by 0.1% in February and 5.2% in March. The increase has turned from negative to positive and is rising monthly, showcasing a positive trend of gradually improving growth. This also reflects the good momentum of China's accelerating economic recovery under a series of supporting policies issued by the Central Committee of the CPC and the State Council. Looking at different levels, tax revenue at local levels increased by 2.5% year on year in the first quarter, which was two percentage points higher than the overall national level. This will help guarantee local financial resources. Looking at different regions, in the first quarter, the tax revenue of the eight provinces and municipalities that have net contributions to central finance, including Beijing, Tianjin, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong and Guangdong, grew by 2.2% year on year, which was 1.7 percentage points higher than the overall national level.

Meanwhile, in the first quarter, tax authorities collected social insurance premiums totaling 1.9116 trillion yuan, guaranteeing timely and full payment of "pension money" and "life-saving money" to the public. In addition, tax authorities collected non-tax revenue and supplementary insurance premiums, occupational annuities, and other streams of revenue totaling 1.3849 trillion yuan.

In summary, in the first quarter of 2023, tax authorities nationwide collected 7.9721 trillion yuan in tax and fee revenue (excluding export rebates). In the second quarter, the pro-growth policies issued by the Central Committee of the CPC and the State Council will continue to play their role and China's economy will maintain a steady upward momentum. In addition, due to the large-scale VAT credit refunds handled in the second quarter of last year, the revenue base is relatively low. Tax revenue is expected to grow rapidly in the second quarter of this year. We will continue to organize tax and fee revenue in accordance with laws and regulations, strengthen the monitoring of revenue quality, resolutely avoid collecting unwarranted taxes and fees, and effectively build up a solid financial foundation for high-quality development. Thank you.

Bauhinia Magazine:

This year marks the 10th consecutive year since the launch of the campaign designed to streamline procedures for filing and paying taxes. How is the campaign progressing? What solid measures will be taken to bring convenience to taxpayers and fee payers? Thank you.

Wang Jun:

Thank you for your questions. I'm very glad to answer them. According to the requirements of General Secretary Xi Jinping, we should always serve the people and rely on the people. As the tax department, we are responsible for enforcing tax and fee collection.

Over the past nine years, the STA has introduced 539 innovative service measures, and local tax departments at all levels have issued a total of over 41,000 supporting measures. That has greatly contributed to the transition of tax and fee services in four aspects. First is the transition from mainly providing offline services to offering both online and offline services. Second is the transition from providing policy services based on people's queries to proactively delivering policy services. Third is the transition from offering generic services to gradually paying more attention to personalized services. Fourth is the transition from providing procedural services to offering services focused on protecting the legitimate rights and interests of taxpayers. Taxpayers and fee payers have responded that the methods of tax and fee payment have been optimized, with higher efficiency, friendlier services and lighter burden.

Since the beginning of this year, the STA has solicited over 1 million pieces of opinions and suggestions from taxpayers and fee payers and amasses over 100,000 pieces of opinions and suggestions from taxation staff at the community level. Based on that and according to the full implementation of new requirements of the CPC Central Committee and new policies of the State Council, the STA has introduced 42 new measures in two batches to improve tax and fee services. Last week, I made research trips to Henan and Shaanxi provinces and found that these measures have been well implemented. However, during face-to-face communication with taxpayers and fee payers, they offered one common demand. That is, a decision taken at the executive meeting of the State Council on March 24 that six preferential tax and fee policies will continue to be implemented and optimized, and they hope to have rapid, convenient and full access to these preferential policies. After learning about the strong demand, I immediately organized multiple rounds of research and discussions, and so last night, we determined the third batch of 20 measures to bring more convenience to taxpayers, focusing on solving this demand. These measures will be released after today's press conference. For example, in terms of speeding up the implementation of policies, focusing on different subjects, we will formulate themed lists of policies and deliver them to various types of taxpayers and fee payers individually to bring policies directly to people in a more targeted and meticulous way. For another example, when it comes to upgrading key services, we will develop specific policy guidance for additional tax deduction for R&D expenses and we will work with relevant departments to launch the "Self-Employed Businesses Service Month." As for the policy on reducing the average time to issue export tax refunds for first- and second-class export enterprises to three working days, we will also extend the duration of the policy to the end of this year to support the better development of foreign trade and export enterprises. And to make tax services more convenient, we will further optimize the functions of the e-tax system, expand the scope and channels of services that can be accessed online, through cellphone apps, and with an undertaking that relevant conditions have been met. We will provide more services to automatically calculate the tax reduction and exemption amounts, and automatically prefill the information for tax declaration. In doing so, we can both ensure that taxpayers and fee payers benefit from preferential policies and make tax services more convenient.

I just mentioned that we have carried out the 32nd tax publicity month nationwide with the theme of "Bringing Tax Benefits to Millions of Households and Jointly Building Modernization" starting on April 1. The campaign focuses on promoting the implementation of preferential tax and fee policies and service measures to further push for the effective and detailed implementation of the campaign designed to streamline procedures for filing and paying taxes.

We are fully aware that there is no end to the improvement in tax and fee services, and that the satisfaction of taxpayers and fee payers is the most important standard. Next, by applying new technologies, we will continue to innovate and improve our services, and we will introduce the fourth and fifth batches of service measures. For instance, we will soon begin piloting cross-border bilingual tax services for equity transfers of overseas enterprises, so that cross-border tax declaration can be handled without the need to be present in person. At the same time, we will pilot smart opening for enterprises newly founded in China in several regions. That is, as soon as an enterprise registers, the tax-related information will be matched automatically, making it possible for the enterprise to get invoices as soon as possible, and we will continue to expand the scope of the trials. For large enterprises with good credit, we will pilot making out invoices based on needs, without a cap on the invoice amount. For taxpayers running simple businesses, we will pilot simplified tax declaration and constantly expand the scope of the trials.

In summary, we will keep working to improve and enhance the quality and efficiency of tax and fee services to ensure that people can always enjoy convenience, and taxpayers and fee payers can not only have easy access to good services but also get things done well and receive timely feedback on their queries both online and offline. We also invite the media to provide their supervision. Thank you.

Xing Huina:

Today's briefing is hereby concluded. Thank you to all the speakers and friends from the press. Goodbye.

Wang Jun:

Thank you, chairperson and friends from the press. Thank you.

Translated and edited by Zhu Bochen, Huang Shan, Li Xiao, Zhou Jing, Liu Caiyi, Yuan Fang, Yan Bin, Yang Xi, Wang Yanfang, Liu Qiang, Wang Yiming, Zhang Rui, Ma Yujia, Xu Xiaoxuan, Zhang Junmian, Cui Can, Xu Kailin, He Shan, Li Huiru, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.