China provided $10 billion tax breaks for small and micro businesses

BEIJING: China has provided USD 10 billion worth of tax concessions to small and micro businesses to help them to ward off negative effects of its economic slowdown which touched a 24 year low last year.

China has expanded preferential tax policies for small companies and reduced their tax burden to boost economic growth and employment, state-run Xinhua news agency reported.

Nearly 80 per cent of urban jobs are provided by small companies, which were also the mainstay of China's exports.

Tax breaks for the SMEs amounted 61.2 billion yuan (USD 10 billion) in 2014, the State Administration of Taxation (SAT) said today.

Business income tax of 10.1 billion yuan was reduced or scrapped from 2.46 million small and micro businesses, as companies with annual taxable business income below 100,000 yuan were eligible for a 50 per cent reduction.

Value added tax and turnover tax cuts were worth more than 51. 1 billion yuan from 22 million small and micro businesses through a temporary suspension for certain small firms from August 1, 2013, to September 30, 2014, according to SAT.

The tax incentives were aimed SMEs coping up with the slowdown of the economy which grew at 7.4 per cent last year, a 24 year low.

IMF projections said that the Chinese economy was expected to decline to 6.8 this year and 6.3 next year.