Charges to be cut for small firms

China's State Council vowed on Saturday to continue efforts to cut charges for small and micro-sized businesses as well as start-ups, in order to invigorate the economy.

Starting from January 1, 2015, the central government will axe 12 charges, including business registration fees, and remove another 42 administrative fees for small firms and start-ups, according to a statement released after a State Council meeting held on Saturday presided over by Premier Li Keqiang.

From 2015 to 2017, small and micro-sized businesses with monthly sales of less than 30,000 yuan ($4,886) will be exempt from five government charges in the three years following their establishment. Local authorities will also be banned from charging any administrative fees other than those stated in a government list.

The latest round of efforts is expected to reduce taxes paid by small firms by over 40 billion yuan a year, the statement said.

"We are delighted to see more government fiscal support to help small and micro-sized firms survive," Zhou Dewen, president of the Zhejiang Federation of Private Enterprise Investment, told the Global Times on Sunday.

Small firms are struggling with rising labor costs, various taxes and fees, and higher financing, as well as the slowdown of the economy, Zhou said.

Lifting the charges will benefit small firms in general, enabling them to create more jobs and increase salaries, and will also foster a better ecosystem for small firms to grow next year, he noted.

"We hope that the government will further slash taxes and fees to reduce the burden for small firms," Zhang Xiaoling, founder of Beijing-based Anyue Yongchang, a Chinese herbal medicine clinic, told the Global Times on Sunday.

Zhang said her firm benefited from previous tax cuts, which lowered taxes and fees to 3 percent of her sales revenues from the original 5 percent, and said she hopes the level will be further cut to 1 percent.

Before the announcement on Saturday, China had already granted tax breaks for small and micro-sized firms.

The government said in April it would halve the amount of taxable income for small companies with annual sales revenue of less than 100,000 yuan, effective till the end of 2016.

The Ministry of Finance also lowered the value-added tax (VAT) rate for smaller companies. Companies that had been paying VAT of 4 or 6 percent started paying 3 percent from July 1.

By the end of 2013, China had 56 million small and micro-sized enterprises and individually owned businesses, making up 94 percent of all registered companies and accounting for more than 70 percent of the jobs in China, according to the State Administration for Industry and Commerce.

China created 10.82 million new jobs in the first three quarters of this year, fulfilling the target of 10 million new jobs for 2014 ahead of schedule, and this was driven mainly by small firms in the services sector following efforts to ease business registration, official data showed.

The optimistic employment data eased market concerns about China's cooling economy, which grew by 7.3 percent year-on-year in the third quarter, a five-year low.

The country has tried to encourage start-ups and private investment by scrapping the minimum level for companies' registered capital and changing the annual business inspection mechanism to an annual filing system in order to facilitate market access for small firms.

China will also gradually push forward pricing reform in the energy, transportation and environment sectors in an effort to introduce more market competition, break monopolies, boost private investment and facilitate economic restructuring, according to the statement released after the meeting on Saturday.