Research On Fiscal And Taxation Policy Of China’s SMEs

Since the21st century, with economic globalization and new technologies emerging, the status and role of Small and Medium sized Enterprises(SMEs) in economic and social development are rising. SMEs not only play an important role in decreasing unemployment rate, promoting technological innovation, economic growth, and social harmony, but also have an irreplaceable position, in promoting market competition, inhibiting monopoly and increase efficiency.Relative to large enterprises SMEs have their own advantages, simple organizational structure, flexible operation, low operating costs. But weak capital strength, the lack of core technology and experience, poor to resist risks, and other factors resulted in SMEs are at a disadvantage position in the competition. Today, whether developed or developing countries are supporting the growth of SMEs. Over the years, in China how to promote the growth of SMEs has been treated as a long-term strategic task. But in the administrative system, securities markets, product markets, labor markets, there are still some negative factors restricting the evolution of SMEs. As a means of adjusting macroeconomic, how to use fiscal and taxation policy to support and guide SMEs, has become an important issue of national studies.Combining with normative and empirical analysis, discussed the current situation of SMEs in China and analyzed the impact of current financial and tax policy to the SMEs, compared classification standards of SMEs and fiscal policies to support the development of SMEs in domestic and foreign, explore similarities and differences with other countries. Thus pointed out we should learn from the advanced experience of foreign countries to contribute to our SMEs’growth.Through research and analysis, building and improving our system of fiscal policy to promote the development of SMEs can start from the following aspects:Financial policy:First, the financial subsidies should be adapted to the needs of different development stages of SMEs. From the establishment, growth, maturity, decline, SME has its own laws of life, in the implementation of fiscal policy also should adapt to and take advantage of this rule, reflecting the policy’s relevance and flexibility. At the same time SMEs should be divided into manufacturing type, service type, high-tech type.Develop comprehensive financing system for different types of SMEs. Avoid SMEs bankruptcy due to lack of development funds on the process of growth. The second is to establish an effective tracking and regulatory means to prevent shell companies to defraud national funds, improve the utilization efficiency of Innovation Fund.Tax policy:First, tax benefits should adhere to industry priority, followed by region. Exempt or halve income tax for newly established SMEs to reduce the load on SMEs. Then clean up the existing unreasonable administrative fees, accelerate the reform of fees and taxes, so that the burden on enterprises will become more transparent. Finally, in order to create a favorable financing environment, implement preferential income tax rate on guarantee agency, expand the scope of business tax exemption and extend the exemption period.