The Chinese government seeks to restore investor confidence in the economy by implementing its first reduction in the stamp duty on stock trading since 2008.
The Ministry of Finance and the State Administration of Taxation announced that the stamp duty on securities transactions would be halved, effective from August 28th.
The reduction of the stock trading levy has already had a positive impact on Chinese stocks, including Alibaba (NYSE:BABA), JD.com (JD), Baidu (NASDAQ:BIDU), and others.
This move marks the first tax cut since April 2008, when China lowered the rate from 0.3% to 0.1% during the global financial crisis to stimulate market growth.
In addition, the China Securities Regulatory Commission has introduced measures to enhance investor confidence, such as lowering the collateral requirements for stock traders and implementing restrictions on major shareholders’ stock sales.
Last week, China’s Ministry of Finance issued the “Interim Provisions on Accounting Treatment Related to Enterprise Data Resources,” clarifying the scope and accounting standards for data resource confirmation.
These new accounting rules are expected to have a significant impact on major tech companies and telecom network operators.
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