Parents of young kids eligible for tax relief

China will build more affordable nursery care services and allow tax deductions for expenses incurred in caring for children under 3 to facilitate implementation of its third-child policy, according to the Government Work Report released on Saturday.

The central leadership announced in May that all couples can have up to three children－rather than two－and a slew of measures will be rolled out to reduce the financial burden of child care and encourage births.

According to two reports released at the opening of the fifth session of the 13th National People's Congress on Saturday, China will construct a number of "convenient, accessible, affordable and quality-ensured" child care facilities and build networks of community-based child care services.

Song Jian, deputy director of Renmin University of China's Population Development Studies Center, said the bulk of responsibilities in caring for babies usually falls on mothers. However, with women's education levels and their participation in the labor force rising, it has become difficult for them to balance child care and work.

Song said that solutions such as asking grandparents to look after babies and hiring nannies are not suitable for some households. And kindergartens in China only receive children aged above 2 years old.

"Developing nursery care services is an important method to solve the dilemma," she told National Business Daily.

Song said that besides supportive measures in the public services sector－including extending maternity leave－that have been adopted by many regions in recent months, another approach is to devise suitable financial policies, such as issuing fertility allowances.

The newly released government reports announced for the first time that care expenses for children under 3 will be included in the special additional deductions for individual income tax.

Ren Yuan, deputy head of Fudan University's Institute of Population Research, said that allowing tax deductions for having children is a common approach around the world to alleviate the burden on families with more than one child.

"Like giving fertility allowances, providing tax deductions based on the number of children in each household can also help relieve financial strain on local governments," he said.

"It is certainly a policy worth promoting widely."

China's demographic profile is undergoing a major shift, with the number of newborns falling for the fifth consecutive year to 10.62 million last year, according to official data and experts.

The country is also aging rapidly, with the proportion of people aged 60 and above rising to nearly 19 percent of the population last year.

To cope with that challenge, the government reports said China will improve elderly care in urban and rural areas, and support the private sector and organizations in providing elderly care services ranging from day care and meal assistance to cleaning and rehabilitation.

Tian Huiguang, a political adviser, said the biggest obstacle facing elderly care institutions looking to expand is a lack of financial investment.

"Governments should formulate financial policies and funding mechanisms for nonprofit, community-level elderly care centers," she said.