(Two sessions) Extensive relief, policy support for small business

Business | 22 May 2020 1:30 pm

Premier Li Keqiang emphasized today that the government would do its utmost to support enterprises.

He made the remarks at the opening meeting of the third session of the 13th National People's Congress in Beijing, today.

He said that micro, small and medium businesses  need support in particular in the context of the coronavirus pandemic in the mainland.

Policies introduced early this year that are due to expire by June will all be extended until the end of the year, Li said.

"They include the following: exempting micro, small and medium businesses from contributions to basic old-age insurance, unemployment insurance and work injury compensation insurance schemes; reducing or cancelling VAT for small-scale taxpayers; exempting VAT on services such as public transportation, restaurants and hotels, tourism and entertainment and culture and sports; and reducing or cancelling civil aviation development fund contributions and port development fees.”

The government expects that these measures will save enterprises an additional 2.5 trillion yuan throughout the year.

Enterprises' production and operating costs will also be reduced.

"The policy of reducing electricity prices for general industrial and commercial business by 5 percent will be extended to the end of the year. The rates for broadband and dedicated internet access service will be cut by 15 percent on average. Rents for state-owned premises will be lowered or exempted, and all other types of property owners are encouraged to also reduce, waive or defer rent payments, and they will receive policy support from the government in doing so."

Corporate income tax payments by micro and small businesses will also be postponed until 2021, as part of a series of measures Li said would result in saving 2.5 trillion yuan for enterprises this year.

Meanwhile, China will increase financial support to keep business operations stable.

"The policy allowing micro, small and medium business to postpone principal and interest repayments on loans will be further extended to the end of March next year, payments on all inclusive loans of micro and small businesses eligible for this policy should also be deferred and other businesses facing financial difficulties can discuss similar terms with their creators," said Li.

The government encourages banks to substantially increase credit loans, first-time loans and loan renewals without repayment of principal for micro and small business.

Large commercial banks should increase inclusive finance lending to micro and small businesses by more than 40 percent.

Li also stressed that regulations should be tightened to "prevent funds circulating in the financial sector for the sake of arbitrage."

 

 

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