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April 1, 2020

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SMEs backed to blunt impact of virus

CHINA will support its small and medium-sized enterprises to mitigate the impact of the COVID-19 pandemic while increasing local government bond issuance to shore up effective investment, according to a State Council executive meeting yesterday.

The meeting, presided over by Premier Li Keqiang, decided that the re-lending and re-discount quota for small and medium-sized banks will be expanded by 1 trillion yuan (US$141 billion).

The country will further implement the reserve requirement ratio cuts for small and medium-sized banks and guide them to offer loans to SMEs at favorable interest rates, the meeting said.

Private businesses and SMEs are also encouraged to raise funds through bond issuance and accounts receivable financing.

The meeting also decided to increase the issuance of local government special bonds to support effective investment, stressing that priority should be given to regions with major projects and low risks.

The country will assign some of the local government special bond quotas ahead of schedule and local authorities should strive to issue the bonds by the end of the second quarter.

The meeting stressed efforts to boost support for people with low incomes, especially those in difficult circumstances, and decided to raise certain subsidy standards and expand the coverage of subsistence allowances and other relief policies to help those affected by the pandemic.

China will also extend subsidies and tax exemptions for new-energy vehicle purchases by another two years in a bid to boost auto consumption, the meeting decided.

Meanwhile, China’s top tax watchdog said yesterday that the amount of the country’s tax and fee cuts had topped 402.7 billion yuan in the first two months.

Of the total, the preferential tax and fee measures unveiled to support the prevention and control of the COVID-19 and economic development saved a total of 158.9 billion yuan, Wang Daoshu, an official with the State Taxation Administration, told a press conference.

The remaining 243.8 billion yuan of taxes and fees were reduced as a result of the implementation of a larger scale of tax and fee cut policies rolled out last year.

The amount of reduced taxes and fees is expected to further expand as new batches of policies aiming to alleviate the burdens of small firms and self-employed businesses were implemented starting from March, Wang said.

The tax administration also said China’s daily invoice issuance across sectors had picked up, pointing to robust momentum of consumption recovery.


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