BEIJING, April 27 (Xinhua) -- The State Council, or China's Cabinet, announced on Thursday a slew of measures to enhance the fiscal, financial and taxation support for small and micro-sized enterprises in a bid to ensure their sound development.
China’s small and micro-sized firms are 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.
Therefore, the Sate Council issued a document to boost the healthy development of small and micro-sized firms as they play an irreplaceable role in creating jobs and promoting the real economy.
The document, including 29 measures in eight aspects, required local authorities to enhance fiscal and tax support for the small and micro-sized firms, relieve their financing difficulties and create a favorable environment for their development.
In terms of taxation, local authorities are required to further implement all the preferential policies for small firms, including raising the tax threshold of corporate value-added taxes and business taxes and extending the policy of halved business income tax to the end of 2015.
Qualified small and medium-sized firms will be allowed to enjoy favorable import tariffs on products for scientific and technological development purposes, according to the document.
Meanwhile, the government 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 of the service industry.
Apart from taxation, the government will continue to improve the fiscal support policies.
The government will increase fiscal support for small and micro-sized companies to 14.17 billion yuan (2.3 billion U.S. dollars) in 2012, up from the previous arrangement of 12.87 billion yuan.
The funds will increase year by year and China’s less-developed central and western regions will be given priority in the distribution of the funds.
At the same time, the government will also earmark 15 billion yuan (2.38 billion U.S. dollars) to establish a development fund for small and medium-sized enterprises, with priority given on newly-formed ones.
The government strives to relieve the financing difficulties of small firms by accelerating the development of small financial institutions, expanding the financing channels and increasing credit guarantee services.
Meanwhile, lending of banks and financial institutions to small and micro-sized firms should grow at a rate no lower than the average loan growth.
It is also the first time that commercial banks are allowed to determine loan interest rates to small and micro-sized firms on their own and government procurement will support small enterprises.
China will also improve public services for small and micro-sized enterprises, according to the document.
By 2015, 4,000 public service platforms will be established and 500 of them will be designated as demonstration platforms to help the technological upgrading of small firms.
Experts said that the document was a summary and specification of the supportive policies mapped out for small and micro-sized enterprises by the State Council since last October.
"'Inclusiveness' and 'innovation' are the two features of the document as it covers all the aspects in supporting small and micro-sized enterprises," said Professor Chen Naixing, director of the Small-and Medium-Sized Enterprises Research Center under the Chinese Academy of Social Sciences.
Chen noted that the document was issued aimed at consolidating the achievements of small firms in boosting employment and driving the real economy.
He also stressed that implementation of the policies will be crucial; otherwise, the document will become a mere formality as some previous measures.