Shanghai policies against epidemic 2022
The Shanghai Municipal Government issued on 28 March 2022 a document titled “Several Policies and Measures to Fight the Epidemic and Help Enterprises Promote Development”, including 21 policies aimed to provide supporting measures and subsidies to enterprises and individuals greatly affected by the epidemic in 2022.
The policies and measures are divided into six key areas:
A. The support to personnel and enterprises directly involved in the fight against the epidemic and in implementing the measures for prevention and control. In the specific,
To provide subsidies to eligible enterprises for epidemic prevention and sterilization expenses. Full subsidies will be granted to employees in key positions in the retail and catering industry for nucleic acid testing, along with personnel in airports, ports, and cold-chain related enterprises;
To provide temporary subsidies to front-line personnel in the fight against the epidemic, including community workers, volunteers, public security officers, etc..… in carrying out prevention and control work;
To support R&D and industrialization activities of innovative products to prevent and control the epidemic, such as new vaccines, rapid detection reagents, and specific drugs.
B. The reduction of costs and taxes burden incurred by enterprises through implementing relief and supporting policies in VAT refund, tax and fees reduction, tax deferral and rental reduction or exemption. In particular:
To promptly implement the VAT credit refund policies on a large scale, as stipulated by the recent Announcement by the MOF and SAT [2022] no. 14 “on Further Enhancing the Implementation of the Policy for the Refund of Period-end Uncredited VAT”;
To implement the reduction and exemption policy related to six taxes and two fees (i.e., resource tax, urban maintenance and construction tax, real estate tax, urban land use tax, stamp tax, farmland occupation tax, education surcharge, and local education surcharge) for small and low-profit enterprises and individual households, as introduced by the Announcement by the MOF and the SAT [2022] no. 10 about “the Further Implementation of the Six Taxes and Two Fees Reduction and Exemption Policy for Small and Micro Enterprises
To provide an extension of the tax filing deadlines in the following periods.
To reduce or exempt the rental fee for micro and small enterprises and individual households leasing a state-owned building. In particular, in 2022, taxpayers in streets and towns where the high-risk areas are located will be granted an exemption from rent for six months and three months for other areas.
C. The increase of the financial support to enterprises affected by the epidemic by reducing financing costs and commission fees and strengthening guarantees. In particular:
To increase the financial guarantee support for new loan applications from micro, small and medium enterprises affected by the epidemic in 2022, with the reduction of the financing guarantee rate of the Municipal Financing Guarantee Center;
To implement discounted interest rates for enterprises in difficulty, especially those operating in the retail, transportation, and other industries greatly affected by the epidemic;
To increase the support from financial institutions to enterprises, which are encouraged to not withdraw, cut, or suppress loans and to maintain reasonable liquidity;
To encourage financial institutions in reducing fees, commissions, service and remittance fees and to promote the role of the insurance risk protection products;
D. The assistance to enterprises in stabilizing their headcount and not laying off employees by reducing social security rates, implementing policies to stabilize and expand jobs, and developing new employment forms. In the specific:
To continue the implementation of reduced unemployment and work-related injury contribution rates;
To provide online vocational training subsidies and implement policies such as training subsidies, entrepreneurial support, and the return of labour union funds to stabilize and expand jobs. Those greatly affected by the epidemic can also apply to extend the repayment of loans for business start up and enjoy additional financial support;
To support the development of new forms of employment by supporting employers in adopting innovative modes and improving social security policies for flexible jobs.
E. The support to the recovery and development of industries hardly hit by the epidemic, with a focus on the catering, retail, tourism, transportation, and exhibition industries in the service sector. In the specific:
To implement supporting measures for catering and other life service industries such as accommodation and housekeeping, and encourage internet platforms in reducing service fees and commissions;
To implement support measures for the retail industry and encourage financial institutions in granting credit and financial support by reducing interest rates.
To implement supporting measures for the tourism industry, with the increase of the proportion of temporary refunds of quality deposits for qualified travel agencies;
To implement supporting measures for the transportation industry, with suspension from the prepayment of VAT for civil aviation and railway transportation enterprises and the VAT exemption for public transportation services;
To implement supporting measures for the exhibition industry by providing subsidies to economic and technological exhibitions in 2022 to overcome the epidemic's impact.
F. The stability of business and life in the Municipality by ensuring the smooth operation and living conditions during the epidemic. In particular:
To support and guarantee the regular operations of enterprises and implement specific epidemic prevention measures different from the “one fits all” to stabilize the industrial and supply chain and ensure smooth transportation and logistic services.
To ensure the orderly operation of the Municipality during the epidemic by increasing the supply of materials and products for epidemic prevention and control, improving the testing capacity, and ensuring the orderly operation of essential services, such as transportation, electricity, gas, water, communication, property services, and to stabilize prices.
The relevant departments of the Municipality will be responsible for the actual implementation and the issuance of the rules and guidelines for the above policies to be implemented until the end of 2022.