August 4, 2017 / 11:22 AM / a year ago

China firms call for more tax cuts in government survey

BEIJING (Reuters) - Despite China’s multi-year campaign to cut taxes and costs for its companies, most firms believe their tax burden is still too heavy, a survey by a government-backed research institute showed this week.

FILE PHOTO: A security guard walks on the bund in front of the financial district of Pudong in Shanghai, China July 27, 2017. REUTERS/Aly Song/File Photo

Half the respondents were satisfied with the current business environment, but 80.4 percent said they would like to see a lighter tax burden and 52.7 percent said financing costs were too high, the survey released by the Chinese Academy of Fiscal Sciences found.

China says it wants to save its companies 1 trillion yuan ($149 billion) in taxes and fees this year as it looks to lighten their load in the face of slowing demand growth and often burdensome red tape.

“While cost-cutting policies have achieved some success, we must also recognize that in structural supply-side reform, cutting costs is a very difficult ... and challenging project,” Liu Shangxi, the head of the academy, which is under the Ministry of Finance, told a news conference in Beijing.

Besides the tax costs, Chinese firms are having to pay increasingly higher salaries to staff, with 45.7 percent of firms calling for labor costs to be cut.

Labor costs rose 6.8 percent nationwide last year, the survey showed.

Firms’ tax burdens have held steady at about 5.3 percent of revenues over the last three years, survey results said.

Reporting by Elias Glenn; Editing by Clarence Fernandez

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