State Council: Reduction of Income Tax on Small-scale Micro Enterprises

On the 12th, Premier Wen Jiabao presided over the executive meeting of the State Council to study and determine financial and fiscal policy measures to support the development of small and micro enterprises.

The conference pointed out that small and micro enterprises have an irreplaceable role in promoting economic growth, increasing employment, technological innovation and social harmony and stability. At present, some small and micro enterprises are faced with difficulties in operation, difficulties in financing, and heavy burden on taxes and fees, which must be given high priority. We must strengthen financial services and support for fiscal and taxation, and mainly increase support for the real economy such as science and technology, services, and processing industries that are in line with national industrial and environmental policies and can absorb employment, and guide and help small and micro enterprises to improve their profitability and development. stamina.

The conference study identified the policy measures for financial support for the development of small and micro enterprises:

(1) Increase the credit support for small and micro enterprises. Banking financial institutions' growth rate for small and micro enterprises ** is not lower than the average growth rate of all **, the increase is higher than the level of the same period of last year, and the lower financial reserve ratio for small financial institutions that meet the requirements continues to be implemented. Commercial banks will focus on increasing credit support for small and micro enterprises under a single household credit limit of RMB 5 million. Strengthen supervision and end-user monitoring to ensure normal production and operation for small and micro enterprises.

(2) Clearing and correcting unreasonable charges for financial services, and effectively reducing the actual cost of corporate financing. With the exception of syndicates**, commercial banks are prohibited from charging commitment fees and fund management fees for small and micro enterprises. The commercial banks are strictly restricted from collecting fees for financial consultants and consulting fees from small and micro enterprises.

(III) Broadening the financing channels for small and micro enterprises. Gradually expand the scale of issuance of small and micro enterprises' collective bills, bonds, and short-term financing bills, and actively and steadily develop financing instruments such as private equity investment and venture capital investment. Further promote the construction of the exchange market and off-market market, and improve the environment for the equity pledge of small and micro enterprises. Actively develop small and micro enterprises **guarantee insurance and credit insurance.

(4) To refine the differentiated supervision policies for financial services of small and micro enterprises. Commercial banks that have a certain percentage of the balance of small- and micro-sized enterprises and the number of customers have loosened their institutional access restrictions and allowed them to set up batches of branches and franchise outlets in the same city. For a small-scale micro-enterprise with a single household of 5 million yuan or less that corresponds to commercial bank issuance of financial bonds, it may not be included in the assessment scope when calculating the loan-to-deposit ratio. Commercial banks are allowed to regard small and medium-sized enterprises with a credit line of less than RMB 5 million as a measure of risk weighting by retailers and reduce capital occupation. Appropriately increase the tolerance of non-performing rates for small and micro enterprises.

(e) Promote the reform and development of small financial institutions. Strengthen the market orientation of small financial institutions focusing on serving small and micro enterprises, communities, residents, and “three rural issues”. On the basis of prudent supervision, we will promote the formation of new types of financial institutions in rural areas, guide small financial institutions to increase service outlets, and extend institutions to counties and townships within their jurisdiction.

(6) To promote the healthy development of private lending on the basis of standardized management and risk prevention. Effectively curb the tendency of private lending, and crack down on illegal activities such as illegal fund raising and financial pyramid schemes. Strict supervision prevents financial employees from participating in private lending. Financial support for small and micro enterprises must be conducted in accordance with market principles, reduce administrative intervention, and prevent credit risks and moral hazard.

The conference study identified the policies and measures for fiscal and taxation support for the development of small and micro enterprises:

(1) Increase tax support for small and micro enterprises. Increase the VAT and sales tax thresholds for small and micro enterprises. We will halve the income tax policy for small profit-making enterprises and extend it to the end of 2015 and expand the scope. The qualified national SME public technology service demonstration platform will be included in the taxation policy for imports of science and technology development products.

(b) Support financial institutions in strengthening financial services to small and micro enterprises. Financial institutions are exempted from stamp duty within three years for contracts with small and micro enterprises. Extend the pre-tax deduction policy for loss allowances for SMEs in financial enterprises to the end of 2013. The policy of reducing the financial and insurance income of eligible rural financial institutions by 3% will be extended to the end of 2015.

(3) Expand the scale of special funds for SMEs, and use indirect methods to support small and micro enterprises. Further clean up the cancellation and reduction of some of the relevant enterprise fees.

The meeting called for all regions and relevant departments to take supporting the healthy development of small and micro enterprises as an important task, and carefully formulated relevant policies and measures to effectively implement them. (Source: China Government Network)