Provincial government offers tax cuts, subsidies amid ongoing outbreaks

Specific policy measures will be implemented to maintain the sustainable growth of the catering, retail, tourism, transportation and civil aviation sectors in Guangdong province amid the ongoing COVID-19 pandemic, according to a circular issued by the provincial government on Friday.

Workers in the retail and catering industries in Guangdong, an economic powerhouse in South China, will receive subsidies covering more than half the cost of regular nucleic acid tests for the novel coronavirus that causes COVID-19.

Internet-based businesses, including takeout food platforms, have been urged to further reduce the service fees they charge catering enterprises to lower their operating costs.

Loans will be offered to catering businesses and insurance companies have been urged to develop tailored products for companies in the sector to help them avoid further economic losses, according to the circular.

"In addition to the policy measures, restaurants also need to provide diversified and tailored services for customers to ensure sustainable business growth," said Yin Jianbo, chairman of Fashion Gourmet Group, which is based in Guangzhou, Guangdong's provincial capital.

Subsidies will be given to the operators of cargo and passenger transportation services using new energy, the circular added.

Public transport services such as buses, subways, taxis and long-distance passenger buses will be exempted from value-added tax in the province.

The 47 measures outlined in the circular also deal with financial aid, tax exemptions and credit financing, aiming to boost the business confidence of market players in the service industry and help them become more resilient amid the COVID-19 epidemic, said Huang Huadong, deputy director-general of the Guangdong Provincial Development and Reform Commission.

"The measures will help lower the operating costs of companies and optimize the business environment to support market players," Huang told a news conference on Friday.

Guangdong reported four new locally transmitted confirmed cases of COVID-19 on Sunday and 18 new asymptomatic carriers, according to the provincial health commission.

The measures also include a 50 percent tax exemption for smaller businesses.

Market players operating in parts of Guangdong formerly listed as high-risk areas for transmission of COVID-19 this year will be offered rent reductions for six months, while those in other areas will be eligible for reductions lasting three months.

The new measures follow close on the heels of 25 others issued by the provincial government early this month. Those measures outlined relief and support policies such as the reduction of production and operating costs, the exploration of market demand and the protection of the rights and interests of small and medium-sized enterprises and privately owned businesses, as well as the provision of flexible and precise funding.

They also stipulated that government procurements worth less than 2 million yuan ($320,000) or engineering projects worth less than 4 million yuan will be reserved for SMEs.

Guangdong has more than 15 million market entities, of which over 6.3 million are SMEs and 8.3 million are individually or privately owned businesses.

In another development, policy measures have also been introduced in Hangzhou, the capital of East China's Zhejiang province, aiming to sustain the recovery and development of service industries in light of the city's latest COVID-19 outbreak.

Since the outbreak started in Xinhangpai Leisure Clothing City on March 5, businesses in Sijiqing, a clothing market in Hangzhou, have had their operations suspended for two weeks, according to a shop manager there who declined to be named.

"A rent reduction or exemption is urgently needed, as we have lost a lot of business in the past weeks," she said on Monday.

According to the measures, small and micro-sized enterprises in the service sector and individual businesses that rent premises owned by city and district State-owned enterprises will not have to pay rent for three months.

The policies introduced in Hangzhou cover financial subsidies, tax reductions and financial credit to effectively boost market confidence in the service sector and promote sustainable development, according to Hangzhou's development and reform commission, with the catering, retail, tourism and transportation industries to receive targeted support.