China is intensifying efforts to optimize its business environment, fuel economic vitality through targeted tax incentives for technological innovation and safeguard market fairness by strictly cracking down on tax evasion, said the State Taxation Administration.

During the ongoing 35th National Tax Promotion Month, themed "Taxation, Rule of Law and Fairness," fiscal data indicated a robust economic recovery. National tax and fee revenues exceeded 8.4 trillion yuan ($1.22 trillion) in the first quarter.

"With existing and incremental policies taking effect, China's economic development has demonstrated a good start, stable foundation and optimal quality," said Wang Daoshu, deputy commissioner of the administration.

Wang said manufacturing sales revenue grew by 5.4 percent year-on-year, while high-tech industries saw a 14.6 percent increase. Corporate purchases of machinery and equipment also rose by 8.4 percent, reflecting strong momentum for equipment renewal.

Highlighting a rapid green transition, Wang added that clean energy power generation now accounts for 36.3 percent of total electricity production sales.

Tax policies have heavily favored technological advancement and the cultivation of new quality productive forces.

"In 2025, tax and fee reductions and refunds supporting technological innovation exceeded 2 trillion yuan, actively injecting power into high-level technological self-reliance," said Huang Yun, spokesperson for the administration.

This included over 760 billion yuan in research and development expense deductions, nearly 400 billion yuan in tax cuts for high-tech enterprises, and over 180 billion yuan in value-added tax credit refunds for manufacturing and scientific services. Consequently, scientific research and technical services saw a 20.4 percent revenue surge, accelerating the transformation of scientific achievements.

On the regulatory front, the recent implementation of the Value-Added Tax Law has yielded positive results.

"The enactment of the VAT Law and its implementation regulations stabilized market expectations, boosted confidence and reduced institutional transaction costs for taxpayers," said Dai Shiyou, director of the tax policy and legislation department under STA.

Digitalization and cross-departmental collaboration continue to transform tax services, with nearly 8,200 domestic and overseas internet platforms now reporting tax-related information.

"The reporting of tax information has made platform operating data more transparent, significantly compressing the space for illegal operations such as concealing or splitting incomes," said Lian Qifeng, director of the tax and information technology administration department of STA.

Authorities are also strictly cracking down on the illegal "invoice economy", which distorts local GDP and disrupts the unified national market.

Wang said the administration is resolutely correcting these practices, adding that first-quarter invoice amounts in six key industries prone to illegal investment attraction dropped by 4.7 percent.

renqi@chinadaily.com.cn