China to exempt VAT for small and micro firms

China will temporarily exempt value-added tax and profit tax for small and micro-sized enterprises from August 1st, in a bid to provide a fairer business environment and support employment. The decision was made at a State Council meeting presided over by Premier Li Keqiang last Wednesday. Under the new rule, companies with monthly revenue of below 20,000 yuan will be exempt from paying VAT and profit tax. The meeting also said the government will simplify its customs clearance and other processes to boost trade. The country will diversify sources of capital for railway construction, allowing private capital to invest in intercity and suburban railways.