The Ministry of Finance and the State Taxation Administration jointly issued a document on implementing the tax reduction and exemption policy for small and micro businesses on Jan 18. The implementation period of this tax cut policy is from Jan 1, 2019, to Dec 31, 2021, which is expected to reduce the tax burden by up to 600 billion yuan ($88.77 billion) for small and micro businesses over the three years.

According to officials of Ministry of Finance and State Taxation Administration, the new policy further relaxes the requirements for small and micro enterprises, and it will benefit 17.98 million enterprises nationwide. It covers 95 percent of small and micro taxpaying enterprises, and 98 percent of these are private enterprises.

The policy reduces enterprises' tax burden through measures such as increasing the tax exemptions threshold from 30,000 yuan per month sales volume to 100,000 yuan per month, relaxing the requirements of scientific and technological startups enjoying favorable tax policies, and allowing local authorities to reduce or exempt taxes up to 50 percent.

The Ministry of Finance and State Taxation Administration are expected to launch further tax reduction and exemption policies.