Tax cuts benefit 2 million more small firms in China

China's tax officials said Wednesday that new tax breaks this year will help more than 2 million small and micro firms to half their tax bill.

To enjoy a 50-percent cut in business income tax, small and micro businesses will no longer need approval from tax authorities, but only have to report to tax agencies, said Liu Lijian, an official in charge of business income tax under the State Administration of Taxation (SAT).

On an open online chat, Liu said more than 2 million small and micro firms, up 30 percent, will benefit.

The Finance Ministry and SAT announced last month that any company with annual taxable income under 100,000 yuan (about $16,000) will have its business income tax halved from Jan. 1 this year till the end of 2016.

Industrial enterprises with no more than 30 million yuan in assets and no more than 100 employees will have their business tax halved for their taxable income between 100,000 yuan to 300,000 yuan, according to the SAT.

For other sectors, companies with no more than 10 million yuan in assets and no more than 80 employees will also enjoy the same tax treatment.

The new rules raise the tax cut threshold from the previous 60,000 yuan, with a tax rate of 20 percent.

By the end of 2013, there were about 11.7 million small and micro companies in China, accounting for 76.6 percent of the total number of firms in the country, according to data from the State Administration for Industry and Commerce.

Taking small family businesses into account, small companies took up 94.2 percent of the total number and provided about 150 million jobs.