China’s Agricultural Sector to get Tax Breaks
China will be increasing its support for its agriculture sector by renewing selected tax breaks that may have already expired as the government is planning another move to support the economy. The stumbling economy this year has led banks to tolerate risks when they lend, thus further reducing the supply of loans to small time borrowers that are usually being ignored by banks due to the reason of being a high risk borrower.
Now financial companies need not to pay for a business tax on the interest earned on agricultural loans as long is not more than 100,000 yuan. Furthermore their corporate income tax will also be discounted by ten percent to boost enthusiasm for the financial institution to lend more to farmers. The tax breaks that were in place but already expired will be reinstated and will be effective until 2016.
Insurers that sells insurance to crop and livestock farmers will also get 10 percent discount on their corporate income tax. A tax break cuts the business tax to 3 percent for financial firms that are working within countries will also be extended until 2016 as well.