UOB on China's tax plan
On the weekend, China released its tax plan and a consensus is growing the more is coming and that growth estimates will be bumped higher.
UOB is out with a report on the plan and notes that "it is likely that further tax measures are in the pipeline."
The plan allows new deductions for mortgage interest, rent, children and personal education, medical expenses and parental support.
UOB says its GDP forecast for 2019 remains 6.3% (in line with the consensus) but could come under review. They also continue to expect more action from the PBOC:
"In line with the PBOC's support for maintaining ample market liquidity, we also reiterate our call for a possible fifth reserve requirement ratio (RRR) reduction either end-2018 after the US Fed FOMC's final rate hike for the year or early 2019 ahead of the Spring Festival when there is seasonally strong liquidity demand."
