China cuts income tax for some small firms

China will cut income tax for some small firms to 20% from 25%, the finance ministry said on Friday, as part of steps to ease burdens on small businesses to support the slowing economy.

Small firms will be subject to the lower income tax until the end of 2024 from the start of 2022, the ministry said in a statement on its website.

To be eligible, the small companies’ annual taxable income cannot exceed 3 million yuan ($472,000), with assets below 50 million yuan and fewer than 300 employees, according to the statement.

China’s Premier Li Keqiang has pledged to deliver tax cuts and rebates totalling 2.5 trillion yuan this year to help cushion a slowdown in the economy.

Small firms in China account for about 80% of urban employment.