China will implement value-added tax credit refunds on a large scale to provide strong underpinnings for keeping the operations of market entities stable and maintaining job security, as part of efforts to sustain stable macroeconomic performance, according to a decision on Monday at a State Council executive meeting chaired by Premier Li Keqiang. The Chinese authorities approved a VAT refund program valued at about 1.5 billion yuan (235,627 million dollars, 214,354 million euros) to “maintain the operations of the market entities and guarantee job security”. This is excess VAT that small and medium sized businesses are due back on their VAT returns. In a statement issued last night after a summit, the Council of State (Executive) reported the measure, designed mainly for micro and small companies, as well as for firms in “key” sectors such as manufacturing. “Under the current circumstances, refunding excess input VAT credits to micro and small businesses and to manufacturing and other key industries is essential for ensuring stable growth at the moment. It is a direct boost to the cash flow of enterprises, and will benefit them more quickly than tax cuts,” Li said.
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