The State Administration of Taxation ("SAT") has recently formulated and issued the Circular on Further Effectively Implementing Measures for Streamlining Administration and Easing Tax Burden to Better Serve the Economic and Social Development (the "Circular").
The Circular proposes measures in six aspects. The first is gaining a profound understanding of the significance of streamlining administration and reducing tax burden. The second is carrying out all tax cut policies without any reservation. The third is solidly implementing measures designed for the individual income tax reform. The fourth is promoting smoothly for the handover of duties in respect of the collection and administration of social insurance contributions and non-tax revenues. The fifth is constantly deepening the reform of "streamlining administration, delegating powers and strengthening regulation, and improving services" in the tax field. And the sixth is organizing and carrying out full-coverage special inspections. With respect to the implementation of the new Individual Income Tax Law, it is required in the Circular that good preparations shall be made in all aspects for raising the basic deduction threshold and applying the new tax rates from October 1, 2018 and fully operating the tax regime for general income and other types of income from January 1, 2019. As to the handover of duties in collecting and administering social insurance contributions, the Circular explicitly states that, tax authorities that have undertaken the collection of social insurance contributions, must keep the current collection policy unchanged, particularly in line with the arrangement already announced by the State Council that "burden of enterprises will not be increased in general", before the reform of institutions responsible for collecting social insurance contributions is fully completed.