The meeting was chaired by Premier Li Keqiang.

The meeting noted the arrangements as set out in the Government Work Report to promptly introduce and implement policies to keep economic operation stable in view of the latest developments at home and abroad.

The VAT credit refund—worth around 1.5 trillion yuan ($235.56 billion) this year—is a relief measure that can support businesses directly and efficiently. It is also a reform that helps cultivate sources of tax revenue and meaningfully refine the VAT system.

"Under the current circumstances, refunding excess input VAT credits to micro and small businesses and to manufacturing and other key industries is essential for ensuring stable growth at the moment. It is a direct boost to the cash flow of enterprises, and will benefit them more quickly than tax cuts," Li was quoted as saying by state-run media outlets.

The meeting decided to refund VAT credits to micro and small enterprises and self-employed households as general VAT payers across all sectors, which is worth around 1 trillion yuan.

Outstanding VAT credits will be refunded in one lump sum by the end of June. Refunds to micro enterprises will be completed in April, and those to small enterprises in May and June. Newly added credits will be fully refunded on a monthly basis starting from April 1.

In addition, tax refund requirement that "newly added credits should be above zero for six consecutive months and newly added credits for the last month should be no less than 500,000 yuan" will be called off on a time-limited basis.

Outstanding VAT credits of enterprises in manufacturing, research and technical services, electricity, heating, gas and water production and supply, software and information technology services, ecological protection and environmental governance, and transportation, storage, and postal services will be fully refunded, the meeting noted.

The refunding process will start on July 1 and be completed by the end of the year. Newly added credits will also be fully refunded on a monthly basis starting from April 1.

On top of paying 50 per cent of the tax refunds under the current tax system, the central government will earmark 1.2 trillion yuan of transfer payments to set up three special funds, to support localities in implementing the VAT credit refunds and tax and fee cuts, and ensuring employment and basic living needs.

The central government will subsidize over 82 per cent of the refunds of newly added VAT credits borne by local governments on average, and weigh its fiscal support toward the central and western regions.

The meeting also noted the imperative to closely watch the impact of shifting international situations on the country's capital market. Continued efforts will be made to pursue development as the top priority, manage China's own affairs well, deepen reform and opening-up and keep major economic indicators within the appropriate range.

The RMB exchange rate will be kept generally stable at an adaptive, balanced level, according to the meeting.

Fibre2Fashion News Desk (DS)