SCIO press conference on development of Hainan Free Trade Port

National Business Daily:

In recent years, the Ministry of Finance (MOF) has introduced a series of supportive tax policies to facilitate the construction of Hainan FTP. How will the tax system reform be further promoted after the launch of the island-wide special customs operation? Thank you.

Liao Min:

Thank you for your question. The issue is of great concern to everyone. As we all know, the construction of the Hainan FTP will inevitably involve the reform of the tax system. The overall requirement for the tax system reform, as proposed in the Master Plan for the Construction of Hainan Free Trade Port, is to implement zero tariff, low tax rates and a simplified tax system in steps and stages. This policy will ultimately form a tax system with international competitiveness to support the construction of the Hainan FTP. After the release of the master plan, the MOF has successively introduced multiple tax policies, such as offshore duty-free shopping, zero tariff on some imported goods, and preferential corporate income tax and individual income tax.

After implementing the island-wide special customs operation, the MOF will take into account the actual progress of the FTP construction and the need to advance higher-standard opening-up to the outside world. We will continue to deepen tax system reform to ensure that policy effectiveness is increasingly enhanced and policy benefits are continuously delivered. This will involve the following five aspects:

First, we will continue to implement the current preferential policies on corporate and personal income tax, in order to attract more high-end talent and high-quality enterprises aligned with the needs of free trade port development to settle in Hainan and contribute to its growth.

Second, we will continue to expand the range of zero-tariff goods and adjust the list of taxable imported goods in a timely manner.

Third, we will continue to implement the offshore duty-free shopping policy, and further refine and adjust the policy arrangements to better meet the diverse shopping needs of consumers, supporting Hainan's development as an international tourism and shopping destination.

Fourth, we will actively explore relevant tax policies for imported goods consumed by the island's residents, and when appropriate, carry out a positive list management system, which will allow residents to purchase certain imported products tax-free. We will launch this pilot work as soon as possible to enhance the sense of gain among the island's residents.

Fifth, we will steadily advance research into reforming sales tax. Sales tax mainly involves the consolidation of multiple taxes and fees such as value-added tax, consumption tax, vehicle purchase tax, urban maintenance and construction tax, and the education surcharge. Given its wide scope and complexity, it requires consideration of both the current situation and long-term policy arrangements. We will promote research into simplifying the tax system in line with the principles of prudence, orderly progress and phased implementation, and conduct pilot tests in a timely manner based on the development of Hainan FTP.

Here, I would also like to thank the media for their interest in and support for financial work. Thank you.

Shou Xiaoli:

The last question, please.