China to cut VAT for aero-makers

Business | Agencies 23 Oct 2019

China's Ministry of Finance yesterday said that it will reduce value-added tax for regional aircraft manufacturers and sellers to 5 percent between Jan 1, 2019 and Dec 31, 2020.

It will return the credit to VAT taxpayers engaged in big aircraft research and manufacturing programs from Jan 1, 2018 and Dec 31, 2023, the ministry said in a statement.

Meanwhile, China's central bank used open-market operations to inject the largest amount of cash into the banking system since May, as upcoming corporate tax payments tighten liquidity conditions.

The People's Bank of China net injected 250 billion yuan (HK$276.9 billion) via seven-day reverse repurchase agreements, according to a statement. There were no facilities coming due yesterday, and the central bank kept the rate steady at 2.55 percent. China's 10-year bond yield was little changed at 3.22 percent.

Elsewhere, the offshore yuan fell 139 basis points to 7.0817 against the US dollar, while the onshore yuan hit a one-month high at 7.0668 per US dollar.

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