The Chinese Ministry of Finance announced on Monday that it will cut or reduce a number of taxes on share transactions in an attempt to stimulate the country's sagging stock markets.
Under the government's plans, there will be a temporary cut in tax on cash dividends and bonuses, which will still be subject to the 20% tax rate, but only on half of the amount.
The government has also temporarily canceled the corporate and individual income taxes and stamp duty for shares involved in the state share reform trial. This trial reform programme seeks to float non-tradable shares previously held by the government, which account for about two-thirds of the domestic stock market capitalisation.
The new measures, which take immediate effect, are intended to revive interest in the country's capital markets after the Shanghai Composite Index sank to an eight-year low earlier in the month.
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