China provides tax breaks to quake-hit businesses

20 May 2008 08:28  [Source: ICIS news]

SINGAPORE (ICIS news)--The Chinese authorities on Tuesday announced various tax incentives for both corporate entities and individuals in an attempt to support earthquake relief and reconstruction work.

 

“These incentives serve to help companies affected in the quake to tide [them] through this period of hardship. Income earned prior to the quake can be offset against the losses incurred from property damages,” said an official from the Ministry of Finance.

The first provision allows for property losses arising from the earthquake to be tax deductible.

The second provision allows for all public welfare donations to be tax deductible.

Concessions for individuals, such as exemption from personal income taxes, property taxes, travel and urban land use taxes were also announced in the same statement.

“These incentives are good news for us, the government has given us confidence for reconstruction,” said a source from chemicals company Sichuan Hongda, whose facilities were severely damaged in the quake with estimated losses standing at CNY 388m ($55.7m).

 

Seventy-four of its employees died in the wake of the disaster, the company added.

 

China’s Vice Minister of Industry and Information Technology Xi Guohua said on Monday the quake was estimated to have cost 14,207 industrial enterprises a staggering CNY67bn ($9.61bn), according to local media sources.

 

Measuring 8.0 on the Richter scale, the 12 May quake which devastated the southwest Sichuan region is the biggest the country has experienced in more than 30 years.

The official death toll stood at over 34,000 people, while the eventual number is expected to exceed 50,000 dead.

Dolly Wu has contributed to this story

 

($1 = CNY6.97)

 

To discuss the effect of the Chinese earthquake visit: The Chinese earthquake on ICIS connect

By: Cheang Chee Yew
+65 6780 4359

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