The state is offering yet another “gift” in its latest bid to promote the development of small and micro enterprises.
In order to reduce the financial burden of small and micro enterprises and promote their healthy development, the Ministry of Finance (MOF) issued a notice jointly with the National Development and Reform Commission (NDRC) stating that small and micro enterprises will be exempted from administrative fees related to management, registration and licences from 1 January 2012 to 31 December 2014.
This represents the latest policy of the state aimed at promoting the development of small and micro enterprises.
Before this, China has introduced a number of preferential tax policies to support small and micro enterprises. They include: extending the period and expanding the scope of reducing income tax on small and micro enterprises by half, and raising the value-added tax and business tax thresholds; exempting the stamp duty on loan agreements signed between financial institutions and small and micro enterprises from 1 November 2011 to 31 October 2014; granting business tax and enterprise income tax concessions to the interest income of financial institutions derived from small amount loans extended to peasants, the financial insurance income of qualified financial institutions, and the premium income derived by insurance companies from providing insurance to the farming and animal husbandry industries; and extending the policy of pre-tax deduction of peasant and SME (small- and medium-sized enterprise) loan impairment reserve for financial institutions to the end of 2013.
Under the current complex economic situation both at home and abroad, a great number of small and micro enterprises are struggling hard to survive in the face of difficulty in financing and heavy tax burden. On 12 October, the Executive Meeting of the State Council came up with nine financial, fiscal and tax policy measures (the “Nine Measures”) in support of the development of small and micro enterprises. After that, a series of detailed support policies were introduced one after another.
Under the notice jointly issued by MOF and NDRC, small and micro enterprises are exempted from 22 administrative fees which include: enterprise registration fee, tax invoice production fee, customs supervision fee, country of origin certificate fee for products, and agricultural machine supervision fee.
The notice states that all departments concerned must oversee the relevant fee charging units under their jurisdiction in strengthening management over the registration and filing of the fee exemption policy offered to small and micro enterprises, and ensure that qualified small and micro enterprises enjoy this preferential policy. Meanwhile, efforts must be made to tighten supervision and inspection whereby departments and units failing to implement the fee exemption policy according to regulations will be penalised and the responsible persons will be subject to administrative liability.
It is understood that the “Nine Measures” announced earlier included taking action “to further review, revoke and lower certain enterprise-related fees”.
While small and micro enterprises offer plenty of job opportunities and contribute significantly to China’s economic development, following the rise in the cost of raw materials, wage and financing, most of these enterprises are facing great difficulties. The problems of difficulty in operation, difficulty in raising funds and heavy tax and fee burden for small and micro enterprises are acute. Hence, preferential financial, fiscal and tax policies are playing an increasingly important role in supporting these enterprises.
