Hi-tech manufacturers get 636b yuan tax breaks

China's tax authorities delivered 636.1?billion yuan ($88?billion) in tax and fee cuts or rebates in the first five months to spur technology innovation and high?end manufacturing, the State Taxation Administration said on Friday.

The bulk of the relief – 415.8?billion yuan – went to advanced manufacturing, including extra VAT deductions for producers of equipment, digital products and other high?tech gear. A further 140.7?billion yuan was shaved from the tax bills of high?tech firms that qualify for a preferential 15 percent corporate income?tax rate.

Early signs point to the policy paying off. VAT invoice data show sales revenue in high?tech industries rose 14.2 percent year?on?year in the first five months, well above the national average. Core digital?economy sales climbed 10 percent, while corporate purchases of digital technologies grew 9.7 percent, underscoring China's push to fuse data and manufacturing.

Overall manufacturing sales increased 4.2 percent year-on-year during the period, with equipment makers up 9 percent and producers of computers and smart devices up 21.6 percent and 19.4 percent, respectively.