China's new Guangdong-Hong Kong-Macao integration initiative will help relieve companies' financial burdens as the corporate tax rate in the new bay area is the lowest not only in the Chinese mainland but also compared with Japan and the U.S.
The corporate tax rate in the Guangdong-Hong Kong-Macao Bay Area is 16.5 percent, while the rates in Japan and the US are 30.86 percent and nearly 30 percent, respectively, He Yaobo, vice president of the Greater China area of the Australian Institute of Certified Public Accountants, told the financial news site yicai.com in an interview on Tuesday.
The corporate tax in the Chinese mainland is 25 percent, He noted.
"The tax rate in the bay area is the lowest," He said, noting it was an advantage of this region.
Under a plan for the area's development, the region will become the top among all the bay areas by 2030, and also a hub for manufacturing, innovation, shipping, finance and trade, yicai.com reported on Wednesday.
Premier Li Keqiang has urged further development of the Guangdong-Hong Kong-Macao Greater Bay Area Initiative, which was highlighted in the 2017 Government Work Report. The initiative, which was first discussed in 2008, aims to emphasize the region's role in global economic supply chains. It has often been compared to other bay areas such as those in San Francisco and Tokyo.
He Yaobo suggested that the support in terms of the tax rate is indispensable for the hub's development. But regions and cities encompassed by the bay area have different levels of economic growth, so local authorities should come up with more detailed tax cuts for companies.
For example, in Qianhai, a pilot economic zone in Shenzhen, South China's Guangdong Province, enterprises that meet favorable industrial policy requirements can get a tax cut of 15 percent, while getting subsidies for attracting overseas talent.
The expert also noted that public-private partnerships and asset-backed securities could serve as financing tools for infrastructure projects in the bay area, which would mean lower government costs, yicai.com noted.
