Tax cuts to boost SMEs' R&D spend

Small firms set to underline human resources, innovation, new products

Editor's Note: More than a year ago, China extended value-added tax reform to all industries, a measure that may have lessened corporates' tax burden by a staggering 680 billion yuan ($98.7 billion) by April-end. The State Council-mandated latest tax cuts and related benefits seek to give a leg-up to even startups and smaller innovation-driven businesses. For instance, the deductible share of R&D expenditure is up from 50 percent to 75 percent. Reforms will continue. This would mean still lower taxes-and a financially stronger industry can boost the economy. In this special report, China Daily captures the potential impact of the tax measures on various businesses.

With tax liability lower now, small and medium-sized technology companies in China will likely increase their spending on human resources and research and development, thereby facilitating innovation and stabilizing growth, observers said.