New tax breaks to be given this year to small and micro businesses that will decrease the taxes due by 50%, which will benefit more than 2 million small enterprises.

Approval from tax authorities is no longer required from small and micro businesses to avail of the 50 percent reduction in business income tax. 

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Small and micro enterprises simply have to report to designated tax agencies to enjoy the reduced rate, according to Liu Lijian, a State Administration of Taxation official currently supervising business income tax.

Liu said on an online chat that over 2 million small and micro enterprises or 30 percent more than previously benefited businesses, will enjoy the new tax break.

Year end 2013 statistics from the State Administration for Industry and Commerce show that there are approximately 11.7 million small and micro companies in China. 

These businesses account for 76.6 percent of all the business in China.

If small family business are included in the count of small enterprises, small enterprises would then make up 94.2 percent of all business in the country.

The Ministry of Finance and SAT made the announcement of the new tax break last month.

With this newly announced tax reduction measure, companies with annual taxable incomes of less than 100,000 Yuan (approximately 16,000 U.S. dollars) only have to pay 50% of their business taxes from January 2014 until December 2016.

Industrial companies, on the other hand, with less than 30 million Yuan in assets and fewer than 100 employees will likewise be required to pay only half of their business tax for their taxable income falling between 100,000 and 300,000 Yuan, according to SAT.

Companies falling under other sectors with assets worth less than 10 million and with 80 employees or less will likewise be entitled to the same tax benefit.

This new tax cut raises the tax cut threshold from its former 60,000 Yuan level with a 20 percent tax rate.