Shenzhen, hometown of Huawei, will offer tax breaks to overseas and local talent to maintain edge in tech amid trade war
- City will lower salary tax to 15 per cent from the current 45 per cent to spur innovation, says deputy mayor
Shenzhen, Hong Kong’s neighbour to the north and mainland China technology powerhouse, will extend tax breaks to top overseas and local talent as it seeks to maintain its edge in innovation amid an escalating trade war between the United States and China.
Wang Lixin, a deputy mayor, said on Sunday the city would use its own operating income to make up for the shortfall in tax revenue. Under the scheme, income tax will be cut to 15 per cent of annual income for certain individuals.
“Suppose you earn a million yuan [US$144,894] a year. Under the new rules, you will need to pay 150,000 yuan as income tax, which saves you about 300,000 yuan at the current level,” Wang told a innovation summit in Shenzhen.
“We need to fill all the links in the supply chain. Then we are truly competitive in the world, and can truly have the power of say,” he said.
It seems the Shenzhen government has been given permission by Beijing to extend favourable tax rates to not only foreign talent, but also local talent, said Zeng Zhen, executive director of the department of urbanisation research at Shenzhen-based think tank China Development Institute.