Date
21 October 2017

SMEs ‘need tax breaks’ as profit margins shrink, paper says

An economic research body has called for the mainland authorities to raise the tax exemption threshold for small and medium-sized enterprises (SMEs) as operating conditions tighten in China, National Business Daily reported Wednesday. Zhou Dewen from the Central Committee’s Economic Commission said increases in staff salary and benefits, as well as production costs and tax payments, have trimmed SMEs’ profit margin to around 3 percent, translating to 40,000 yuan (US$6,600) to 50,000 yuan in annual profit for a company with 1.2 million in annual revenue. Only SMEs with less than 20,000 yuan in monthly revenue are tax-exempt, and industry has lobbied the government to raise the threshold to 100,000 yuan a month. Industry and Information Technology Minister Miao Wei said the government is aware of the situation and looking into ways to address the issues, the report said.

– Contact HKEJ at [email protected]

EL/AC/SK

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