China to launch policies supporting SMEs

To help SMEs tide over the pandemic, the government will implement more supportive policies to help SMEs operationally and financially.
By: | February 25, 2022
Topics: China | Compensation and Benefits | Health and Wellness | News

Among other measures, the country will continue to cut taxes and fees for SMEs. “Small and medium-sized enterprises benefited the most from last year’s tax and fee reduction,” said Yu Weiping, vice finance minister. China’s total tax and fee cuts last year amounted to nearly 1.1 trillion yuan (US$173.9 billion), official data showed.

Yu added that as a major impetus for economic and social development, SMEs play a crucial role in increasing employment, improving people’s livelihood and promoting entrepreneurship and innovation.

Small enterprises in the manufacturing sector will enjoy tax deferrals on all of their domestic value-added tax and income tax, while medium-sized enterprises will enjoy a 50% tax deferral.

In addition, the government will ease the financing pressure of SMEs by establishing inclusive finance demonstration zones and improving their financing environment.

From 2018 to 2022, a total of 9 billion yuan (US$1.4 billion) will be allocated to boost innovation and entrepreneurship among SMEs that feature specialisation, refinement, uniqueness and innovation, said Yu.

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Currently, the country has more than 300 “little giant” firms listed on the market, with the two-year average growth of operating revenue and net profit exceeding 25%, twice the average of all listed companies.

“China will further step up preferential tax policies and roll out a slew of measures to create more financing channels for small and medium-sized enterprises,” Yu said, according to Xinhua.