China will provide tax breaks to more small companies as policy makers seek ways to spur domestic consumption and boost an economy growing at the slowest pace in more than two decades.
The companies will benefit from a preferential policy on corporate income taxes following an expansion of the program, the State Council, or cabinet, said in a statement yesterday. The preferential policy, under which corporate income taxes will be cut by half, will be extended to small companies with annual taxable income of no more than 300,000 yuan (USD46,907), compared with 200,000 yuan previously, the cabinet said.
Pressure is growing on the government to bolster growth after data showed exports falling in July, while industrial production, investment and retail sales all missed analysts’ estimates. The central bank devalued the yuan by the most in two decades this month.
Small businesses “are a main source of employment and a key driver of development,” the cabinet said. The tax breaks will “provide further tax support to small and micro businesses and allow the government’s proactive fiscal policy to have a greater impact.”
The tax breaks will take effect from Oct. 1 and continue through 2017, it said. Bloomberg
Cathay misses estimates on USD482m fuel hedging loss
Cathay Pacific Airways Ltd., Asia’s largest international airline by passengers, reported net income that lagged behind analyst estimates after it had losses from fuel hedging and passenger yields dropped. Shares plunged.
Profit jumped almost sixfold to HKD1.97 billion (USD254 million) in the six months ended in June, Hong Kong-based Cathay said in a statement yesterday. Sales in the first six months declined 0.9 percent to HK$50.4 billion.
Cathay shares fell the most in more than six years after the results, which included a HK$3.74 billion loss from fuel hedges. Last year’s slump in the crude oil market had left several Asian carriers holding hedges placed when oil prices were higher, adding to the challenges for Chief Executive Officer Ivan Chu.
“It’s a mixed set of earnings,” said Mohshin Aziz, a Malayan Banking Bhd. analyst in Kuala Lumpur. “On the revenue side things were very weak, much weaker than expected. Fortunately on the cost side, they seem to be making a lot of improvements.”
The airline had an unrealized fuel hedging loss of HK$7.42 billion at the end of June, Cathay said in the statement.
Cathay’s shares fell 7.7 percent, the biggest decline since April 27, 2009, to close at HK$15.38 in Hong Kong. The stock dropped for an eighth consecutive day, the longest losing streak in more than two years. Bloomberg
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