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State Council Announces Fiscal and Financial Policies to Support Epidemic Control

At its executive meeting on 5 February 2020, China’s State Council called for redoubled efforts to ensure the supply of key medical resources and daily necessities for intensified epidemic prevention and control, and decided on fiscal and financial policy support for epidemic prevention and control and for the industries concerned.

First, all-out efforts will be made across the country to meet the needs for essential medical supplies and medical personnel in Hubei province, especially in the city of Wuhan. Second, local governments are urged to fulfil their primary responsibilities and make every effort to ensure the provision of daily necessities, including “market basket” products. Third, greater efforts will be made to ensure smooth transportation, and illegal acts such as arbitrary road blockage will be promptly stopped. The meeting also announced that the following measures have been temporarily adopted from 1 January 2020:

  • Manufacturers of key products for epidemic prevention and control will temporarily enjoy one-time tax reduction for equipment purchased to expand production capacity. Incremental excess input tax credit will be refunded in full
  • Revenue from shipping key epidemic control supplies and providing public transportation, consumer services and express delivery will be exempt from value-added tax
  • Eligible epidemic-control drugs and medical devices will be registered free of charge, and support will be intensified for the research and development of therapeutics and vaccines
  • Civil aviation enterprises will be exempt from contribution to the civil aviation development fund
  • The targeted re-lending policy will be effectively implemented, and banks will be supported in providing loans to key enterprises, including small and micro enterprises, in the production, shipment and sales of essential medical and epidemic control supplies and daily necessities at preferential rates. A 50% interest discount will be financed by the state coffers to keep the interest rate at less than 1.6%

The meeting stressed that fiscal and auditing departments must strengthen their supervision and oversight and that illegal acts of defrauding fiscal and credit funds will be severely punished.

Source: State Council

Content provided by Picture: HKTDC Research
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