Tax break helps small businesses save $17b
Updated: 2015-02-27 15:42
By By Zheng Yangpeng(Xinhua)
More than 100 billion yuan ($16.6 billion) in tax break eased tax and fees burden of small businesses last year, an official with the Finance Ministry said on a Friday policy briefing.
Shi Yaobin, deputy minister of Finance Ministry, said the combined tax break for micro and small businesses in China until Dec 31, 2014, was 61.2 billion yuan. Along with more than 40 billion yuan cut on various fees imposed on these firms, they were able to save more than 100 billion yuan last year.
The State Council, China's cabinet, on Wednesday decided that from 2015 to the end of 2017, companies with annual taxable income under 200,000 yuan will have their corporate tax rate halved to 10 percent. Previously, the threshold was 100,000 yuan.
Asked about the impact of the new expansion in tax break, Shi estimated that about a few million more companies would be able to enjoy the tax break, adding that it is difficult to pinpoint the number given the fluidity of small business.
Previous data showed that under the 100,000 yuan threshold, 2.46 million small firms enjoyed the corporate income tax break in 2014.
This is the fourth time in the past five years that the scope of tax break for micro and small companies has been expanded. China previously announced tax incentive policies in 2010, 2011 and 2013.
However, the total tax eased just represented a tiny faction of China's 14 trillion yuan total fiscal revenue last year.
But Shi said it is simplistic to just focus on the absolute number. "You should consider the great role these small firms could play in Chinese economy," Shi said.