The government will integrate fiscal and financial policies and continue parts of expired preferential tax policies to the end of 2023, according to the State Council executive meeting chaired by Premier Li Keqiang on April 7.

The tax support policies will remain applicable to inclusive financial services and micro-loan companies to help serve micro and small enterprises, self-employed individuals and farmers.

As the source of wealth increases, employment represents the most significant issue in people’s livelihoods, Premier Li said, emphasizing the need to give priority to stabilizing employment while advancing epidemic prevention and control and socio-economic development simultaneously.

“With micro and small enterprises and self-employed individuals being a major contributor to job creation, fiscal and financial policies should be combined to support inclusive finance, in order to help micro and small enterprises, self-employed individuals and farmers go through this difficult time,” said Premier Li.

Premier Li also required a holistic view of risks arising from an appropriate interest rate cut in providing loans for enterprises and farmers, adding that employment instability is the biggest risk in the current situation.

The Premier stressed that financial institutions should keep close track of production and management of micro and small enterprises, self-employed individuals and farmers, and provide them with more convenience, including preferential loan and tax policies, to minimize the negative effects of the epidemic.

The meeting decided to extend parts of expired preferential tax policies to the end of 2023.

Value added tax will be exempted from the interest income of financial institutions earned by offering loans of 1 million yuan and below to small and micro businesses, privately or individually owned business and farmers, according to the meeting.

Also, interest income earned by offering loans of 100,000 yuan and below to farmers and insurance premium earned by offering insurance services for crop farming and breeding industry will be assessed by 90 percent into the total taxable income.

And, value added tax will be exempted from the interest income of small loan companies earned by offering farmers loans of 100,000 yuan and below, and income will be assessed by 90 percent into total taxable income; and loan loss reserves provided at 1 percent of year-end loan balance can be deducted pre-tax.

Related departments should accelerate efforts to carry out the supportive policies to help micro and small enterprises, privately owned and farmers go through the epidemic, the Premier said.