At the executive meeting of the State Council, China's Cabinet, on March 28, it was decided to cut taxes for market entities this year.

According to the meeting, the tax cut plan will further improve the taxation system and support the development of the real economy, especially micro-sized enterprises.

The tax rate for manufacturing will be reduced from 17 percent to 16 percent, and the tax rate for transportation, construction, basic telecommunication services and farm produce will be reduced from 11 to 10 percent. The tax cuts will come into effect on May 1, 2018.

The tax thresholds will also be adjusted. The threshold for the taxable annual sales volume of industrial and commercial enterprises will be raised from 500,000 yuan ($79,520) and 800,000 yuan to 5 million yuan, which means more small-scale enterprises will get tax reductions or even tax exemptions in the future.

Over the past five years, China has reduced more than 2.1 trillion yuan tax in total. Premier Li Keqiang has pledged the tax cuts will apply equally to Chinese companies and foreign-owned companies.