The State Council, China's Cabinet, decided on Monday to make a special individual income tax additional deduction for the care for infants under 3 years old. This raises the number of such special additional deductions to seven, covering the expenses for infants' care, children's education, continuing education, medical treatment for serious diseases, housing loan interest, housing rent, and for supporting the elderly.

The COVID-19 resurgences and global uncertainties call for urgent policy support and care for the macro economy and people's livelihoods. The government will continue to cut taxes and fees for market entities, especially small and micro businesses, and make tax and fee reductions more targeted.

To encourage couples of childbearing age to have more children, the country needs to take into account the cost of living, children's education, pension problems and housing difficulties they face.

As early as in June last year, the top authorities issued a document proposing to include the care expenses for children under age of 3 into the special individual income tax additional deduction.

According to the regulation, taxpayers who have a child under the age of 3 will have 1,000 yuan ($157) deducted from their income per month before paying taxes. Although the new policy has just been announced, it actually became effective starting Jan 1.

The universal benefit dividend given to people through tax cuts can not only make people's livelihoods better and sustainable, but also gradually activate people's awareness that such "livelihood" forms a sustainable demographic dividend, defuses a series of problems brought by the aging society, and resolves the anxiety of people about marriage and childbirth.