“Tax cuts and fiscal input are like the two sides of a coin. Both can catalyze innovation,” Premier Li Keqiang said at the State Council executive meeting on April 25.

Those at the meeting decided to roll out seven more measures to boost tax cuts, aiming to relieve over 60 billion yuan ($9.4 billion) of tax burden from small businesses.

“This move focuses on small and micro companies, but it will give the whole economy a shot in the arm,” the Premier said.

As required by the Central Economic Work Conference and the Government Work Report, tax cuts are beneficial for reducing the costs for innovation and entrepreneurship, energizing small and micro businesses and spurring job creation.

“Actually, small businesses are the largest containers of employment, the basis of economic development”, Premier Li stressed.

Tax deduction has been the priority of the State Council since 2013, with the annual taxable income threshold of small and micro businesses eligible for halved income tax being constantly raised. It will be raised again from 500,000 to 1 million yuan.

The per unit value of newly-purchased R&D instruments and equipment eligible for one-time tax deduction will be raised from 1 million to 5 million yuan.

These two measures became effective on Jan 1 and will expire on Dec 31, 2020.

Those at the meeting also decided to abolish the preclusion of the expenses of commissioned overseas R&D from additional tax deduction. The time limit for the capital loss carryover of high-tech firms and technological SMEs will be extended from five to 10 years. All enterprises will see the tax deduction for their employee training costs raised to 8 percent, the same rate as high-tech companies enjoy, from the current 2.5 percent. These three measures became effective on Jan 1.

In other business, measures of stamp duty relief for books of account were adopted, beginning May 1.

Also, according to the decision made at the meeting, the tax incentive enjoyed by venture capital firms and angel investors that sees 70 percent of their investment deducted from the taxable income of the seed and early stage high-tech startups they finance will be extended nationwide. The policy has been piloted in the country’s eight innovation and reform experimental zones, including the Beijing-Tianjin-Hebei area, Shanghai and Guangdong, as well as in the Suzhou Industrial Park.

Such tax cuts were implemented on Jan 1 for corporate income tax and will begin July 1 for personal income tax this year.

It is expected that these incentives will boost enterprises’ innovation, the Premier said.

“We need business tycoons, but we should pay more attention to growing enterprises because of the potential they contain. What we do today is to encourage them to grow bigger tomorrow,” he added.