Decision to increase tax support for rural finance

December 3 (Xinhua) -- Premier Li Keqiang of the State Council presided over an executive meeting of the State Council on December 3, deploying the rollout of Zhongguancun pilot policies on a larger scale and accelerating the development of national independent innovation demonstration zones to further encourage mass entrepreneurship and innovation; and deciding to increase tax support for rural finance to help advance the reform and development of “agriculture, rural areas and farmers”.

The meeting noted that since 2010, the state has piloted in the Zhongguancun independent innovation demonstration zone in Beijing a series of policies to promote scientific and technological innovation, covering finance, fiscal and taxation matters, talent incentives and research funding, and has achieved positive results. At present, it is necessary to accelerate the innovation-driven approach, advance the reform of science and technology systems and mechanisms with greater intensity, roll out pilot policies on a larger scale, and use the “subtraction” of government power in exchange for the “multiplication” of enthusiasm for innovation and entrepreneurship. This will help stimulate the initiative, enthusiasm and creativity of the people, especially researchers, speed up the commercialization of innovations, promote the growth of high-tech industries, create new momentum for China's economic development, and drive the economy toward the medium-to-high end.

⟦NL> The meeting held that work on “agriculture, rural areas and farmers” has always been the top priority of government work and must never be relaxed for a moment. It is necessary to adhere to the requirements of targeted regulation and, by improving fiscal and tax policies, enhance the motivation and capacity of financial support for the development of “agriculture, rural areas and farmers”. This is of great significance for strengthening food security, raising farmers' incomes, accelerating structural adjustment and advancing agricultural modernization. To further ease the problems of high costs and high risks of agricultural loans and the difficulty for low-income farmer households in obtaining loans, the meeting decided to extend the following two policies, which have already expired, to December 31, 2016: First, exempt financial institutions from business tax on interest income from small-sum loans to farmer households of no more than 50,000 yuan, and count 90% of it in the taxable income for enterprise income tax, so as to motivate financial institutions to lend to farmer households. Second, for the premium income of insurance companies from crop farming and livestock breeding insurance business, count 90% of it in the taxable income for enterprise income tax, so as to expand insurance protection and services for farmer households. At the same time, in view of the fact that farmers' loan demand is mainly concentrated in the range of 50,000 yuan to 100,000 yuan, the ceiling for small-sum loans to farmer households eligible for tax preferences will be raised from 50,000 yuan to 100,000 yuan, and the tax preference policy of levying business tax at a reduced rate of 3% on the insurance business income of county-level rural financial institutions will be extended to the end of 2016. This will keep policies benefiting farmers working continuously and promote agricultural development and increase farmers' incomes.