People watch a robot playing piano during the 8th China Robotop and Intelligent Economic Talents Summit in Yuyao City, east China's Zhejiang province, May 24, 2023. (PHOTO / XINHUA)

BEIJING - China has decided to extend several favorable measures, including lending support and tax reduction, for micro and small firms to boost their growth.

For micro and small firms and self-employed households that currently enjoy a 1 percent favorable value-added tax rate, reduced from 3 percent, the policy will remain in effect

Taxpayers with monthly sales revenue of no more than 100,000 yuan (about US$14,000 ) will continue to be exempt from value-added tax, according to statements jointly released by the Ministry of Finance and the State Taxation Administration on Wednesday.

Meanwhile, for micro and small firms and self-employed households that currently enjoy a 1 percent favorable value-added tax rate, reduced from 3 percent, the policy will remain in effect.

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Relevant financial support will also be maintained. Lender income stemming from loan interest and guarantee fees related to such small business entities will remain free from value-added tax, and their loan contracts will continue to be exempt from stamp duty.

On the same day, China also announced the extension of favorable taxation policies for venture capital firms and individual angel investors making investment in tech startups.

The move is aimed at further encouraging entrepreneurship and innovation, according to the statements.

Under the policies, those investors or investment firms that pick up a stake in a tech startup at the seed stage or early stage, and which stay invested for two or more years, can deduct 70 percent of their investment amount from their taxable income.

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According to Wednesday's statements, eligible tech startups are defined as those with no more than 300 employees, and with both total assets and annual sales revenue not exceeding 50 million yuan (about $7 million).

All the policies mentioned above will be effective until the end of 2027, read the statements.