Core Viewpoint - The article discusses the recent tax policy issued by the Ministry of Finance and the State Administration of Taxation, which introduces 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. These measures are expected to enhance the net income of the receiving entities and position the social security fund as a long-term institutional investor in the capital market, promoting a shift from short-term speculation to long-term value investment [1][6]. Tax Exemption Measures - The four tax exemption measures include: 1. Exemption from value-added tax on all interest and interest-like income from loan services and financial product transfer income obtained during the investment process of transferred state-owned equity and cash income [3]. 2. Income from the transfer of state-owned equity and cash income investments will be classified as non-taxable income for corporate income tax purposes [4]. 3. Exemption from stamp duty for the transfer of non-listed state-owned equity by the receiving entities [5]. 4. For the transfer of listed state-owned equity and the securities transaction stamp duty incurred from cash income investments, a system of prior collection and subsequent refund will be implemented [5]. Impact on Investment Dynamics - The tax incentives are expected to directly enhance the net income space for the receiving entities. For instance, the exemption from value-added tax can lower transaction costs, allowing investment returns to be fully realized. The stamp duty exemption encourages participation in the non-listed equity market, while the non-taxable status of transfer income amplifies the actual retention ratio of investment returns. These measures are anticipated to significantly improve investment return rates and motivate the receiving entities to invest more actively [6][8]. Broader Policy Implications - The introduction of these tax incentives sends three key policy signals: 1. "Stabilizing expectations" by reinforcing the long-term stability of the social security fund and alleviating pension payment pressures due to an aging population [8]. 2. "Promoting reform" by indicating the government's acceleration of state-owned enterprise reform in conjunction with the social security system [8]. 3. "Stabilizing the market" by reducing investment costs for receiving entities, indirectly encouraging increased allocation to the capital market, thus injecting long-term funds into markets like A-shares [8]. Sustainable Policy Framework - The transfer of part of the state-owned capital to bolster the social security fund is a significant measure taken by the central government to enhance the sustainability of the basic pension insurance system. The framework established in 2017 aimed to address the pension fund gap by transferring 10% of state-owned equity from major state-owned enterprises and financial institutions. With the completion of the transfer process, the receiving entities are now positioned to manage and operate these assets effectively [10][11]. - The recent tax policy is seen as a crucial execution guarantee that complements the foundational framework established in 2017 and the operational guidelines set in 2024, creating a closed loop from "capital transfer" to "capital appreciation" [11].