The State Council has unveiled a new package of tax cuts totaling 550 billion yuan ($83.66 billion) for businesses this year to shore up support to smaller firms and sustain the momentum of the economic recovery.

In its executive meeting on Wednesday, the Cabinet adopted measures to continue support to small and micro businesses, self-employed individuals and businesses in the advanced manufacturing sector.

The meeting, chaired by Premier Li Keqiang, decided the favorable policies offered to smaller firms will be extended to cover self-employed individuals. For this year and next year, smaller firms and self-employed individuals will see their corporate income tax cut by half for the part of their annual taxable income that is less than 1 million yuan, according to a summary of the meeting.

Meanwhile, the tax-free threshold in the value-added tax for smaller firms and self-employed individuals will be raised from the current monthly sales volume of 100,000 yuan to 150,000 starting April until the end of next year.

The meeting also adopted steps to include manufacturers in sectors such as transportation equipment, machinery for electoral engineering, instruments and apparatus and pharmaceuticals into the list of advanced manufacturing firms that can enjoy the excess input VAT refund policies.

Li said at the meeting supporting the growth of smaller firms and self-employed individuals is key stabilizing the job market, as such businesses are major creators of jobs.

He cautioned authorities against levying fees in an arbitrary manner on top of the tax cuts.

"We need to employ more policies and reform measures that are fair and inclusive to usher in greater benefits for market players and improve their vitality," he said. "In the meanwhile, we need to guide local authorities to take advantage of the opportunity from the recovery in the growth of fiscal income to lower the leverage ratio, prevent new blind investments and make the government finance more sustainable."