February 12, 2014

Nine departments including the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly promulgated the Guiding Opinions on Promoting the Healthy Development of Labor-intensive Small and Medium-sized Enterprises (the "Opinions") recently, requiring local governments to practically enhance supports for labor-intensive small and medium-sized enterprises (SMEs) and effectively reduce their burdens.

The Opinions put forward that, it is required to reduce the tax burdens of enterprises, promote the implementation of the promulgated policies concerning increase of the threshold of VAT and business tax and the preferential policy for income tax of small-sized enterprises with meager profits as well as the policy to temporarily exempt the VAT and business tax of certain small and micro-sized enterprises.

The Opinions encourage banking financial institutions to raise the scale of loans for labor-intensive SMEs, actively develop financial products and modes of services in conformity with the features of labor-intensive SMEs, customize financing schemes and reasonably determine the loan interest rate for the enterprises.

(Source:LexisNexis)