Small and micro enterprises have always been the main force in China's economic development, playing an important role in stimulating innovation, promoting entrepreneurship, and stabilizing employment. However, there are also some common objective problems. Noting the new and worrisome developments amid generally steady economic operation, the anti-risk ability of small and micro business is weak, and the operation stability is vulnerable to fluctuations. The tax system’s discount and support are an important guarantee for the optimization and upgrading of small and micro enterprises.In order to support the healthy development of small and micro enterprises, since the 13rd Five-Year Plan, especially in 2019, China has successively issued a series of favorable tax policies with deepening strength and expanding scope. There are two prominent characteristics in the process of tax and fee cuts in Jiangsu Province. First, the implementation of policies is good. Second, small and micro enterprises have a strong sense of policy acquisition.The effect of the tax and fee cuts has initially shown, but it still needs to be further improved. On the one hand, the cost savings caused by tax reduction cannot be effectively used to expand employment; on the other hand, tax incentives may have a lagging effect on promoting employment of small and micro enterprises. The effects of fee reduction on labor productivity and innovation input are uncertain, but it directly promotes the employment growth.
