A new ruling in Hebei province that is intended to protect company development allows those with monthly sales of less than 20,000 yuan to be exempt from added-value and sales taxes, as of Aug 1.

A provincial tax official explained that at least 100,000 small companies will benefit from the new policy, after August. For August, they still needed to declare their taxes for the month of July, but will be exempt from the added-value and sales tax in September when they make their August declaration.

Tax regulations say that three to five percent of total sales of a company are taxable, depending on the industry. Under the new ruling, not only do small companies profit, but individuals or companies in the transportation business as well, along with seven service industries. More than 45,000 taxpayers in these industries will fall under the new sales tax regulation, paying five percent per month.