A package of tax and trade policies introduced alongside Hainan Free Trade Port (FTP)’s island-wide special customs operations, set to be launched on Thursday, is expected to deliver broad benefits to businesses and residents of the tropical island, said an official of Hainan FTP.
Wang Fengli, deputy director of the Office of the Free Trade Port Working Committee of the Communist Party of China Hainan Provincial Committee, made the remarks in the latest episode of China Economic Roundtable, an all-media talk show hosted by Xinhua News Agency.
Following the launch, the Hainan FTP will see a sharp rise in its level of zero-tariff treatment, said Wang. The number of tariff lines eligible for zero tariffs will expand from about 1,900 to around 6,600, lifting the overall zero-tariff ratio from 21 to 74 percent.
Beyond zero tariffs, lower tax rates form another major policy advantage of the Hainan FTP, Wang said, noting that companies can benefit from multiple policies across different stages of production and operation.
He cited the example of a biopharmaceutical company. During the construction and research phase, imported raw materials and equipment can qualify for zero tariffs, reducing import costs by 5 to 10 percent. In manufacturing, products made with zero-tariff imported inputs and meeting a value-added ratio of 30 percent or more can be shipped to the Chinese mainland free of import duties.
Once profitable, the company can also benefit from a preferential corporate income tax rate of 15 percent, while its executives and technical staff may qualify for a 15 percent personal income tax rate, the official said.
Taken together, these measures offer companies opportunities for development across the entire industrial chain, Wang said.
Local residents will also see tangible benefits after the launch of special customs operations, the official added. One key change is access to a wider range of duty-free goods.
Authorities are studying tax policies for imported goods consumed by island residents, with plans to introduce a positive-list system that would allow residents to purchase selected imported products duty-free, according to Wang.
« Increased opportunities for international exchanges and cooperation are expected to make work and daily life on the island more convenient and diverse, » said the official.
by Xinhua
