China Mulls Tax Breaks For Drug Companies

by Mary Swire, Tax-News.com, Hong Kong

01 July 2002

The Chinese government is considering offering tax breaks to companies which invest in the development of new drugs.

Speaking to the China Daily newspaper on Friday, Li Sujing, the head of the policy division at the Law and Regulation Department of the Ministry of Science and Technology, revealed that his ministry, in conjunction with other government departments, is considering reducing taxes for pharmaceutical companies which develop new drugs, or even exempting them altogether.

Mr Li told the newspaper that although pharmaceutical development is steadily increasing in popularity as an investment area, research and development of new drugs on the Chinese mainland has traditionally been weak. However, with a new taxation policy as the central pillar of a comprehensive support strategy, the Chinese authorities hope to change all that.

The policy divsion chief announced that the tax incentives will be available to both domestic and overseas investors, but admitted that the new policies are unlikely to be agreed upon this year.

'I hope we'll start surveys next year and work out plans then,' he told the China Daily.

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