The suspension of VAT and turnover tax could benefit 6 million businesses, but steps should be taken to ensure they actually do

The business community has welcomed the suspension of value-added tax and turnover tax for small businesses with monthly sales of less than 20,000 yuan ($3,230) from Aug 1. The move was announced in a statement released after a State Council executive meeting, which was presided by Premier Li Keqiang, on July 24, and is another preferential tax policy to boost the development of small businesses.

The tax exemption is expected to benefit about 6 million small businesses and boost the employment and income prospects of more than 20 million people - and thus help stabilize the economy in transition. On the individual level, it can help a small business save between 600 and 1,000 yuan a month.