The large-scale tax and fee reduction undertaken by China in 2019 served as an important measure for the country to deepen supply-side structural reform and promote high-quality development of its economy.

According to the recent Central Economic Work Conference, the country will consolidate and further expand its achievements in tax and fee reduction in the next year.

Based on the actual situation, total tax and fee cuts in the year are expected to reach 2 trillion yuan (about $286 billion), or more than 2 percent of the country’s GDP, a figure significantly higher than in other countries.

Statistics indicated that China's massive tax and fee cut measures saved enterprises and individuals nearly 1.97 trillion yuan in the first 10 months of the year, including nearly 1.65 trillion yuan in tax cuts and 321 billion yuan in social security fee cuts.

“The tax and fee cut measures issued by the country have greatly promoted the development of smart manufacturing in enterprises,” said Zhou Jianhua, financial chief of a company that launched a self-developed smart train on Sept. 3. It was China’s first full self-driving train.

In the first 11 months, Zhou’s company saved over 100 million yuan thanks to the tax and fee reduction, providing sufficient cash flow for its production and R&D.

Figures showed that 473.8 billion yuan in taxes and fees were cut for the manufacturing sector in the first three quarters of this year, accounting for 31.36 percent of the total.

“VAT reform focuses on promoting the real economy, especially the healthy development of the manufacturing industry, and it has directly increased the cash flow in the sector and spurred growth,” said Bai Jingming, vice president of the Chinese Academy of Fiscal Sciences.

In the first nine months of 2019, private enterprises and individuals were the largest beneficiaries of China’s tax and fees reduction. They saved 964.4 billion yuan in this period, accounting for 64 percent of the total.

The tax and fee reduction also incentivized people to start businesses and created more jobs.

“These measures are really timely, and energized young people like us. I can save nearly 60,000 yuan in tax each year, which is a tangible benefit,” said Huang Zhihui, who returned to his hometown after graduating from college and started an eco-agricultural company.

Small- and medium-sized enterprises (SMEs) are a major force for developing the economy, a major channel of job creation and an important source of innovation. “China enhanced its efforts to reduce taxes and fees for these enterprises this year, which has greatly promoted mass entrepreneurship and innovation, expanded employment, and injected vitality into economic development,” said Zhang Bin, director of the taxation research office of the National Academy of Economic Strategy, Chinese Academy of Social Sciences.

Apart from enterprises, the general public also benefited from the tax cut measures, especially the individual income tax reform. In the first three quarters, a total of 442.6 billion yuan in additional individual income tax was cut, equivalent to a reduction of 1,764 yuan per person.

“The reduction directly increased the disposable income of residents, increased their consumption power, and gave impetus to economic development,” said Li Xuhong, director of the Research Institute of Fiscal and Taxation Policy and Application under the Beijing National Accounting Institute.