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Business / Policy Watch

China reiterates enhanced support for small firms

(Xinhua) Updated: 2012-04-27 10:15

BEIJING - The State Council, or China's Cabinet, on Thursday required local authorities to take further steps in enhancing fiscal and tax support for the country's small and micro-sized companies and relieving their financing difficulties.

A document issued by the State Council said that the country will halve the business income tax for more small and micro-sized firms and extend the policy until the end of 2015. The government will also allow qualified small and medium-sized firms to enjoy favorable import tariffs on products for scientific and technological development purposes.

Taxation authorities will also push forward trial programs to replace the turnover tax with a value-added tax for small companies in a move to address the double-taxing problem, according to the document.

The document noted that the nation's small and micro-sized firms are currently facing increasing operational pressures and rising production costs amid a complicated and uncertain economic situation, and financing difficulties and heavy taxation are adding more pains.

The government will expand fiscal support for small and micro-sized companies to 14.17 billion yuan ($2.3 billion) in 2012, up from the previous arrangement of 12.87 billion yuan. Meanwhile, firms in the country's less-developed western regions will be given priority in the distribution of the funds.

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