Starting April 1, preferential tax policies carried out by the Baotou Municipal Tax Service of the State Taxation Administration will directly benefit small and micro enterprises (SMEs) as well as manufacturing enterprises, according to local media reports.

From April 1 to December 31, 2022, small-scale value-added tax taxpayers will be exempt from value-added tax (VAT) collection if the three percent collection rate is applicable to taxable sales income. For prepaid VAT items subject to a three percent pre-collection rate, pre-paid VAT is suspended.

Lu Jiachi, the chief of the Baotou Tax Bureau's Goods and Services Tax Section, noted that the new preferential policies cover nearly all the small-scale taxpayers.

On April 1st, the city also started a large-scale policy on VAT credit refunds. About 153.6 thousand taxpayers are expected to benefit from the preferential policy.

The tax bureau will also focus on refunding term-end excess input VAT credits of medium-sized enterprises from July to September and those of large-sized enterprises from October to December. It will bring ample cash flow for the manufacturing enterprises.

Baotou has been promoting tax reduction policies since 2016. In 2021, it cut 2.64 billion yuan ($394.15 million) of tax for its enterprises.