The State Council Information Office has announced that value-added tax reforms will take effect on May 1. 

An official, speaking at a press conference, says the VAT rate will be reduced by one percent for industries such as manufacturing and transportation, and on products such as agricultural goods. 

The annual sales limit for a business to qualify for a lower tax rate has been raised from 0.5 and 0.8 million yuan to 5 million yuan.

Meanwhile, the Ministry of Finance will also establish a national financing guarantee fund with commercial banks to help small and micro businesses as well as farmers that are experiencing financial difficulty, by the form of limited liability company, and gradually develop a financing guarantee system by the method of government support, resource and risk sharing, overall planning and consideration, and multilevel linkage.

The assistant of Finance Minister, Xu Hongcai, said that deepening value-added tax reform is an important tax reduction measure and policy for this year. 

It is calculated that the new policy will reduce the tax burden on the main market by more than 400 billion yuan throughout the year, which will account for about 50 percent of the tax cut target proposed by the government work report, and both domestic and foreign enterprises will gain the same benefit. 

In terms of the financing guarantee fund, about 500,000 small and micro businesses will be supported in the next three years, and the new guarantee loan will be around 500 billion yuan, accounting for 25 percent of the existing financing guarantee at a business scale nationwide.