More Chinese small firms to get loans with taxpaying records

More Chinese cash-starved small and micro-businesses have easier access to credit support thanks to the information sharing system between banks and tax departments, officials said on April 22.

The system, which facilitates the transition from taxpaying credit to bank credit, allows banks to offer loans to firms with eligible tax payment records from the tax departments, said Han Guorong, an official with the State Tax Administration (STA).

So far, outstanding bank loans via the system has totaled 573.2 billion yuan (about $80.85 billion), up 74 percent year-on-year, said Li Junfeng, an official with the China Banking and Insurance Regulatory Commission.

Due to the epidemic, the rating-based system is now covering a wider range of firms, which doubled the number of eligible ones, with a total of 50,000 small and micro businesses in the hard-hit Hubei province fitting into the qualifications.

Small and micro firms have received 181.63 billion yuan worth of loans based on taxpaying credit in the first quarter, up 22.3 percent from the same period last year, said Han.

As the epidemic may affect business activities of companies and their tax payment ratings, Han said that the STA has extended tax filing deadline four times, granting deferred filing and payment for 121,000 and 51,000 taxpayers since February, respectively.

Delayed tax filing and payment of virus-hit taxpayers are exempt from penalties and won't hurt their eligibility to apply for loans, Han added.