China has decided to grant a package of preferential tax policies to its rust belt in northeast China, which includes the provinces of Heilongjiang, Jilin and Liaoning.
According to the document released by the Ministry of Finance and State Administration of Taxation, the policies include the adjustment of value-added tax, resources tax and corporate income tax.
The document stipulates corporate taxpayers in equipment manufacturing, oil and petrochemical sectors, metallurgical and ship-building and auto sectors and farm produce processing industry might use the amount of the new value-added tax to cover designated taxes. That include taxes on their purchased fixed assets, goods to be made by the taxpayer as fixed assets, labor services or fees paid for shipment of fixed assets.
With approval of provincial governments, a deduction of no more than 30 percent of the amount of resources tax to be paid is applicable to oil fields with low oil abundance or mines with little exploitable mineral resources, according to the document.
The corporate income tax policies include no more than 40 percent drop in period of depreciation of fixed assets of manufacturing companies in northeast China, excluding houses and structures, and of intangible assets that were bought or invested.
The amount of salary that is tax exempt is 1,200 yuan (US$146), compared with 800 yuan (nearly US$100) for other areas in China.
Northeast China used to the major industrial center in China from 1949 to the late 1970s. Since China opened up to the outside world, it has lagged far behind coastal areas, which absorbed far more overseas investment.
(Xinhua News Agency September 26, 2004)
