Shanghai to help businesses cut costs by US$7.85 billion in 2018

Shanghai will help companies and businesses to reduce their cost burden by 50 billion yuan (US$7.85 billion) in 2018 with a series of policies and measures .

"In 2018, we will stick to push forward the supply-side reforms and focus on streamlining administration and lightening burden on companies to improve the business environment and vitalize the market in Shanghai," said Ma Chunlei, director of the Shanghai Development and Reform Commission.

To meet the 50-billion-yuan target, Shanghai has implemented 18 policy measures in 9 areas to slash cost on businesses. 

The measures will help cut taxes, lowering the ceiling of imposed government funds, lessening charges, reducing costs of labor, energy, financing, and institutional transactions as well as encouraging regional pilot programs.

One of the measures will help businesses qualify as "small-scale VAT taxpayers" and pay only a 3-percent VAT because the threshold for general value-added tax payers including industrial and business enterprises has been raised from 500,000 yuan and 800,000 yuan respectively to 5 million yuan from May 1.

"By now, 368 businesses have applied for the registration" to become small-scale VAT taxpayers, said Li Ming, chief auditor of the Shanghai Bureau of Taxation. "The applications can be accepted until the end of the year."

Also, businesses will now have to pay only twice the amount of the average wage for insurance for the disabled, down from three times.

Shanghai has also cut fees for city road repairs, land use for foreign-funded companies, registration for drugs and medical equipment, and testing charges for special equipment.

Meanwhile, costs of institutional transactions are reduced in tandem with deepening reform of the administrative approval system. The city has implemented measures to further promote the pilot reform in separating operating permits and business licenses, optimizing administrative approval processes, and promoting the "Internet Plus Government Services"  to streamline administration and delegate power to lower levels.

in 2017, Shanghai issued 15 policies in six areas and cut over 53 billion yuan in line with deepening supply-side structural reform. From 2016 to 2017, the city slashed over 153 billion yuan in costs for businesses.