Businesses in Shanghai will be entitled to tax breaks if they sign unemployed people on at least one-year contracts, labor officials said yesterday.

The preferential policy involves reductions in companies' sales tax, urban maintenance and construction tax, added staff training and education fees, waterway engineering maintenance and management fees and business income tax as well, the Shanghai Labor and Social Security Bureau said.

The breaks will be granted according to the number of jobless people the company hires. Officials did not disclose details of the size of the tax breaks.

Employers will enjoy the preferential policy for no more than three years for each staff member hired.

"The new policy actually expands the tax-break coverage and encourages more companies to create steady job vacancies for the jobless," bureau spokesman Bao Danru said in an online press conference yesterday.

Previously, the city ruled that companies could enjoy tax breaks only after the number of reemployed people accounted for at least 30 percent of their total staff numbers.

Removing the unemployed staff percentage requirement could not only expand the beneficiary number but facilitate policy implementation as well, Bao said.

Meanwhile, jobless people could continue to have similar tax-break preferential policies if they start up their own businesses, officials said.

The city pledged to create 500,000 positions for jobless people in rural areas this year.

(Shanghai Daily June 2, 2006)