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Increase tax and fee reduction efforts, extend policy validity period

The Ministry of Finance and the State Administration of Taxation have recently issued multiple announcements, clarifying the optimization and continuation of multiple tax preferential policies, and further supporting the development of small and micro enterprises and individual businesses. It is understood that the preferential policies released this time mainly have two characteristics: increased tax and fee reductions and extended policy validity period.

This time, a series of tax and fee reduction policies have been released, focusing on supporting the development of small and micro enterprises and individual businesses, with strong targeting and increased reduction efforts.

For example, the announcement shows that for individual industrial and commercial households whose annual taxable income does not exceed 2 million yuan, personal income tax will be reduced by half. Reduce resource tax, property tax, urban land use tax, etc. by half for small-scale value-added tax taxpayers, small and micro profit enterprises, and individual industrial and commercial households.

Experts analyze that this policy has expanded the scope of personal income tax reduction for individual industrial and commercial households, from less than 1 million yuan to less than 2 million yuan. On the other hand, the reduction rates of resource tax, urban land use tax, and other taxes have also been clarified.

Professor Zhu Qing from the School of Finance and Economics at Renmin University of China: For example, for small taxes such as resource tax and urban land use tax, previous documents stipulated that provincial governments could reduce or not reduce taxes based on the actual situation of the local area and the needs of macroeconomic regulation. As long as the reduction in taxes does not exceed 50%, it is acceptable. This document stipulates that all taxes will be reduced by 50%, so the intensity of tax reduction has been increased.

The reporter found that the tax incentives for small and micro enterprises have been further extended in this policy. For example, the announcement shows that small and micro profit enterprises will calculate their taxable income at a reduced rate of 25% and pay corporate income tax at a rate of 20%. This policy will continue to be implemented until December 31, 2027.

Experts say that this policy is aimed at supporting the development of small and micro enterprises, providing discounts and benefits in corporate income tax, and further extending the policy period.

Zhu Qing: For example, if the actual taxable income of small and micro enterprises is 100000 yuan and we offer a discount of 25%, then when calculating income tax, we only calculate it at 25000 yuan, multiplied by a 20% tax rate, and its actual tax burden is 5%, greatly reducing the actual tax burden of small and micro enterprises.

The reporter noticed that in this announcement, multiple policies were originally due to expire at the end of this year or next year, but will be directly extended until the end of 2027. Experts say that the extension of tax and fee preferential policies will play a promoting role in the development of small and micro enterprises and individual businesses.

Alleviate the difficulties and high costs of financing for small and micro enterprises and individual businesses

In the multiple tax and fee preferential policy announcements released this time, tax incentives for financing loans for small and micro enterprises and individual businesses are also clearly defined, promoting the alleviation of financing difficulties and high financing costs for small and micro enterprises and individual businesses.

The announcement shows that interest income obtained from small loans issued by financial institutions to small and micro enterprises and individual businesses is exempt from value-added tax. Exemption from stamp duty on loan contracts signed between financial institutions and small and micro enterprises.

Experts say that this tax and fee reduction policy for financial institutions is very targeted, specifically exempting value-added tax on small loan interest granted to small and micro enterprises and individual businesses, and improving the enthusiasm of financial institutions to provide small loans to small and micro enterprises and individual businesses.

The reporter noticed that the policy released this time also mentioned that the guarantee fee income obtained by taxpayers providing financing guarantees for farmers, small and micro enterprises, and individual businesses will continue to be exempt from value-added tax.

Experts believe that this policy will also play a positive role in alleviating financing difficulties and high financing costs.

Professor Zhu Qing from the School of Finance and Economics at Renmin University of China: Financial institutions often require guarantees to prevent credit risks. Guarantee means that if the borrower cannot repay the loan, the guarantor will repay it on behalf of the borrower. This time, in order to encourage financial institutions to issue loans to such farmers, small and micro enterprises, and individual businesses, the government will provide guarantees for these small and micro enterprises and individual businesses, and also exempt them from value-added tax. This will encourage some institutions to provide credit guarantees for these small and micro enterprises and individual businesses.

Stabilizing Expectations and Boosting Confidence to Stimulate Enterprise Innovation Vitality

According to data from the State Administration of Taxation, in the first half of this year, the country added 927.9 billion yuan in tax reduction and fee deferral, with small and medium-sized enterprises benefiting the most. Experts say that the recently released optimization and continuation of tax and fee preferential policies will further alleviate the financial pressure on small and micro enterprises and individual businesses, and continue to stimulate the innovation and entrepreneurship vitality of enterprises.

To further support entrepreneurship and innovation, this announcement clearly states that the tax policy conditions for venture capital enterprises and angel investors to invest in start-ups and technology-based enterprises will continue to be relaxed.

Zhu Qing: There are two types of investment: corporate investment and individual investment. Only by investing funds in start-ups can they enjoy tax incentives, which means that after two years of investment, 70% of the investment amount can be used to offset the taxable income of investors. In this way, individuals and companies who invest are encouraged to increase their investment in this type of entrepreneurial technology enterprise.

According to data released by the State Administration of Taxation, in the first half of this year, small and medium-sized enterprises added 576.6 billion yuan in tax reductions and deferred tax refunds, accounting for 62%, with the most significant benefits.

Experts believe that the tax and fee policies implemented in the early stage have achieved good results in stabilizing growth. The series of policies released this time focus on the development of small and medium-sized enterprises and their related financial support. The continued optimization and implementation of multiple tax preferential policies will help stabilize enterprise expectations, enhance market confidence, assist the development of small and medium-sized enterprises, and promote sustained economic recovery.