The Ministry of Finance announced in May a package of tax relief measures for industries most affected by the Sars epidemic. The 3 per cent tax on airline's passenger revenue is being waived from May 1 to September 30, and other taxes and fees on tourism, entertainment and travel businesses will be cut or suspended. Details of tax relief for hotels, restaurants and other service sectors will be decided by local governments, while income tax will be suspended or reduced for taxi drivers in cities affected by Sars, as would business taxes on taxi companies.
The measures are likely to lead to a loss of Yn20bn-30bn in tax revenue in 2003, said Zhang Peisen, a senior researcher for the State Administration of Taxation.
In May, Premier Wen Jiabao led a special cabinet meeting to agree on measures to stimulate business and employment. The plans included the stabilisation of agricultural production, higher state spending and the encouragement of consumer spending on cars, houses and other goods.