Tax credit financing scheme to help Hunan SMEs
|
Financing difficulty is a major hurdle for most small and medium-sized enterprises (SMEs) these days. Thanks to the tax credit financing scheme jointly launched by the tax department of Hunan province and the Bank of Communications, Chen Biao, general manager of Baixin Iron Structures Co, successfully secured a credit line of Rmb10 million from the Bank of Communications.
According to the provincial state taxation bureau, Hunan is the first of central China's six provinces to offer tax credit financing, a service aimed at helping enterprises secure commercial credit on the basis of their tax credit. The service was officially launched in June this year. SMEs of a sizeable scale with a sound tax credit record that have paid their local and state taxes on time and in full may apply for loans three times the amount of their taxes due in the light of their annual tax payable, asset-liability ratio, credit record and experience in the business. In this scheme, an enterprise’s good reputation in paying tax honestly is an important basis for the granting of bank loans.
“Tax credit financing which takes tax credit instead of commercial credit as the basis for the granting of loans is a ‘timely help' to SMEs facing bottlenecks in their development. It also provides backing to the normal operation and development of enterprises,” said Chen Biao, whose company grosses over Rmb100 million in annual sales revenue but faced working capital pressure a while ago.
It is understood that corporate legal persons holding a valid business licence with annual inspection stamp may apply to the Hunan branch of the Bank of Communications with all the required documents for tax credit financing service if they meet the criteria of the Hunan branch of the Bank of Communications and the tax department. The tax department is responsible for signing the proof of tax payment and the corporate credit appraisal. The loans thus obtained may only be used as short-term working capital in the stages of purchase, production and sales. Their use in the stock market, futures market, and real estate market is strictly forbidden.
|
|
