Mon, 12 May 2003

China unveils new tax rules to battle SARS

Reuters, Beijing

China has unveiled new tax and insurance measures to fight the SARS virus, which has killed and infected more of its people than any other nation.

The official Xinhua news agency says taxes will be cut for businesses hit hard by Severe Acute Respiratory Syndrome (SARS), and tax breaks will be given to aid donors and health workers.

Eight Chinese insurers, including heavyweights such as state- owned China Life and Ping An Insurance, have also launched 13 new policies to help calm fears and meet medical bills.

The southern province of Guangdong, where the virus first surfaced late last year, has organized tax breaks that could cost 900 million yuan (US$109 million) should the outbreak last through August, Xinhua reported late on Friday.

The province has cut business taxes on transportation, tourism, hotels, entertainment outlets and restaurants and given tax breaks of up to three months on real estate or land use taxes, it says.

It has also exempted from income-tax donations, subsidies to health workers and medicine and supplies given to residents, it adds.

The central government has decided to waive or cut administrative fees on SARS-hit businesses, with effect from May 1 to Sept. 30, Xinhua says, without elaborating.

Hoping to cash in on a potential windfall, eight Chinese insurers have unveiled SARS policies with a term of one year. Premiums, which insurers have struggled with given the lack of data on what is an almost unknown disease, have also been set.

Xinhua said every yuan ($0.12) spent will buy 1,000 yuan of coverage.

SARS has infected more than 4,800 people and killed at least 230 in China, nearly half the global total, as well as hitting tourism and transport by scaring off travelers.

One of the country's wealthiest provinces, Guangdong had 13.2 percent less business tax on entertainment during the first quarter this year than in the same period of 2002, Xinhua said.