Core Viewpoint - The Ministry of Finance and the State Taxation Administration have issued a notification to implement four tax exemption measures to support the transfer and management of state-owned equity and cash income for the social security fund, effective from April 1, 2024 [1][2]. Tax Exemption Measures - The first measure exempts value-added tax on all interest and interest-like income from loans and financial product transfer income obtained by the receiving entities during the investment process of transferred state-owned equity and cash income [2]. - The second measure classifies income from the transfer of state-owned equity and cash income as non-taxable income for corporate income tax purposes [3]. - The third measure exempts the stamp duty that the receiving entities should pay when transferring non-listed state-owned equity [4]. - The fourth measure implements a "first collect, then return" policy for stamp duty on the transfer of listed state-owned equity and on securities transactions using cash income [4]. Impact on Investment Dynamics - The tax incentives are expected to enhance the net income space for receiving entities, thereby increasing their investment returns and encouraging them to diversify their asset allocation beyond traditional low-risk assets [5]. - The measures are anticipated to transform the social security fund into a long-term institutional investor in the capital market, promoting a shift from short-term speculation to long-term value investment [5]. Policy Significance - The notification signals a commitment to stabilize expectations, promote reforms, and support the market by reducing investment costs for receiving entities, thereby injecting long-term capital into the market [5]. - The policy aims to address the sustainability of the basic pension insurance system amid increasing aging population pressures and to enhance public confidence in the social security system [5]. Historical Context - The transfer of state-owned capital to supplement the social security fund is a significant initiative by the central government, aimed at addressing the pension fund shortfall by transferring 10% of state-owned equity from major enterprises and financial institutions [7]. - The operational framework for managing the cash income from these transfers has been established, with a focus on market-oriented and professional management principles [8].