HONG KONG: Chinese authorities are planning to cut stamp duty on stock trading by as much as 50 per cent, three people with knowledge of the matter said, in a further attempt to revitalise the country's struggling stock market.
The quantum of the cut, which has not been reported before, is likely to be set at 50 per cent, they said.The State Council Information Office, which handles media queries on behalf of the government, did not respond to a faxed request for comment. The Ministry of Finance and the China Securities Regulatory Commission did not respond either.
"A reversal in the long-term trend of the market would be triggered by expectation of economic improvement, rather than stamp duty cuts." However, the modest stimulus has so far failed to satisfy investors, who are demanding a stronger policy response including massive government spending. The CSRC on Aug 18 unveiled a package of proposals including supporting share buybacks to support the country's US$11 trillion stock market.
China's fiscal revenue totalled 20.37 trillion yuan last year, with 276 billion yuan or 1.35 per cent contributed by stamp duty on securities transactions, official data showed.