Tax break widened to more small businesses
reduction of their business income tax, according to a statement released after the meeting, which was presided over by Premier Li Keqiang.
The measure will be effective fromJan1of this year to theend of2017. During thesameperiod, these companies could also pay the tax at a rate of 20 percent, five points lower than other enterprises, it said.
Eligibility for the 50-percent reduction has been expanded several times since 2012. The original threshold was a business income below 30,000 yuan, but that was amended to the current 100,000 yuan. The new threshold will be 200,000 yuan. According to the State Administration of Taxation, tax breaksforsmallandmicrobusinesses in China totaled 61.2 billion yuan last year. Business incometaxes of 10.1 billionyuan were reduced or scrapped for 2.46 million small and micro businesses.
Wang Yuanzhi, deputy secretary-general of the China Association of Small and Medium Enterprises, said the decision will help companies by relieving their tax burden further. “It shows the government’s increasing support for these companies,” Wang said, adding that the reduction of taxes and fees is a necessary measure to ensure stable development of small, lowprofit companies.
Small and micro businesses are a key driving force of innovation and employment, Wang said. As their products and services are closely related to people’s livelihoods, they play a crucial role in maintaining China’s steady economic growth.
Officials at the meeting also lowered the rate for unemployment insurance fees from the current 3 percent to 2 percent, a measure that is projected to save more than 40 billion yuan for enterprises and employees.