Gao Sumei, a director from the Economic System Reform and Economic Operation Division of the Ministry of Information Industry, disclosed that tax rules would be loosened for certain software types.

Gao made the remarks at the China Embedded System Annual Meeting 2006 held in Shunde, Guangdong Province, and he said the State Taxation Department will loosen its policy on embedded software soon. Embedded software exports have been the main force in China's software export sector.

Of the total US$3.59 billion software products China exported last year, US$2.87 billion were from embedded software, accounting for 79.9%, and among the top ten software companies that made the highest income in 2005, six were engaged in embedded software services.

However, the initiatives and business goals of many embedded software companies was harmed by the Taxation Department's cancellation of the tax return policy at the end of last year. Gao said that through consultation between MII and the Taxation Department, the tax return policy for embedded software companies may be resumed early next year.