BEIJING, Aug 2 Reuters China39;s finance ministry on Wednesday unveiled a package of tax relief measures to support small businesses and rural households, as the world39;s secondlargest economy struggles with a postCOVID recovery.

Amid weak demand both at home and abroad, China39;s economic recovery has lost steam since April, adding pressure on policymakers to revive the economy as some small firms are particularly struggling with fewer orders, financing difficulties and shrinking profits.

The finance ministry said it would extend a valueadded tax VAT cut for small taxpayers for an additional four years until the end of 2027, according to a statement.

The ministry would exempt valueadded tax for small taxpayers with less than 100,000 yuan 13,921.95 in monthly sales and cut the rate on taxable sales revenues to 1 for those normally eligible for a 3 rate, the statement said.

Those offering guarantees of borrowings or bond issues by rural households, small firms and individual businesses would also be exempted from paying the VAT on revenue generated from the guarantees, the ministry said.

Interest income deriving from financial institutions39; microlending to small and microsized firms and individual businesses would also be exempted from VAT until the end of 2027, said the ministry in a separate statement.

Micro loans entitled to the exemption refer to lending to businesses of those types with no more than 10 million yuan in credit lines.

The ministry also…