Strong Support For MSMES
Measures have been put in place in China to support micro, small and medium enterprises in the wake of the pandemic
Micro, small and medium-sized enterprises (MSMES) account for more than 90 percent of all Chinese businesses, data from China’s National Bureau of Statistics show. They play a vital role in the socio-economic development, particularly in terms of job creation, improvement of living conditions, and innovation. On the other hand, MSMES are at a disadvantage in terms of availability and cost of financing, among others.
The COVID-19 pandemic control measures have further elevated the difficulties of these businesses. MSMES in the service sector as well as those in downstream industrial chains have faced challenges to their operations, including obtaining orders and financing, labor shortages and logistics disruptions.
To help them overcome the difficulties, favorable policies have been put in place by governments at both central and provincial levels.
Tax and fee reductions
The Report on the Work of the Government released at China’s annual session of the National People’s Congress in March said that this year, it is essential to combine rebates and refunds to support struggling enterprises. According to the report, the government will issue VAT credit refunds ahead of time this year on a big scale, which primarily go to micro and small enterprises. Priority would be given to these enterprises by refunding outstanding VAT credits to them in one lump sum by the end of June, while newly added credits will also be fully refunded. In total, the amount of tax and fee reduction is estimated to be about 2.5 trillion yuan ($372 billion).
Jiangxi Xinyuanji Electronic Technology is now operating at full capacity. “Our sales have been impacted by the pandemic. The good news is that the tax authorities told us that we will have a VAT credit refund of 1.5
The Report on the Work of the Government released at China’s annual session of the National People’s Congress in March said that this year, it is essential to combine rebates and refunds to support struggling enterprises.