China has decided to roll out a new batch of inclusive tax-cutting measures for small and micro businesses, with the goal of saving them a total of 200 billion yuan (about 30 billion U.S. dollars) each year.

The policies will include substantial drops in business income tax rates and a considerable increase in the tax threshold, according to a statement released after a State Council executive meeting chaired by Premier Li Keqiang on Wednesday. More companies will be covered by the favorable policies.

The development of small and micro companies is key to a sound economy and stable employment, according to the meeting.

Small firms with taxable revenues of less than 1 million yuan will see the tax rate fall to 5 percent, and those with revenues above 1 million yuan but lower than 3 billion yuan will have a rate of 10 percent.

More than 95 percent of businesses can enjoy the tax reduction, and 98 percent of which are private enterprises.

The threshold of value-added tax for micro firms and the self-employed will be improved from 30,000 yuan to 100,000 yuan in terms of monthly sales.

Governments will also significantly reduce a basket of taxes on areas including resources and land use for small companies, and roll out favorable policies for investors in tech startups.

All the tax policies will be effective for three years and retrospective from Jan. 1.

The meeting also called for implementation of the recent cut in bank reserve requirement ratios and continuation of prudent monetary policy that would ease financing difficulties for private as well as small and micro firms.

The issuance of 1.39 trillion yuan in local government bonds will be accelerated, to be completed by the end of September. The funds raised will be used on a priority basis to support projects under construction.

Backed by the bond issuance, a series of projects in transport, water conservation and environmental protection will start construction sooner.

Efforts will also be made to address the unpaid wages of migrant workers, according to the meeting.