Starting on May 1, the replacement of business tax with value-added tax (VAT) extended to construction, real estate, finance and consumer services, to ease tax burdens on all industries. In June, the tax reporting period of VAT will start.
Experts have described the VAT tax reform as the most significant tax and fiscal reform in decades, as it further improves China’s tax structure and will sustain economic growth in the long run. The latest extension came four years after the first trial run of the services sector VAT reform in the financial hub of Shanghai.
Business tax refers to a levy on the gross revenue of a business, while VAT refers to a tax levied on the difference between a commodity’s price before taxes and its cost of production. An across-the-board replacement with the VAT will lower tax burdens on all industries, streamline the taxpaying process and benefit small businesses in particular, encouraging more investment, entrepreneurship and innovation in the economy.
The State Council invites you to join the discussion on issues concerning the tax reform, such as how it might change your life and business. It is a great opportunity to participate in China’s policy-making and have your voice heard by Premier Li Keqiang. Please do not hesitate to write to the Premier’s email address at: firstname.lastname@example.org, identify yourself and offer your insight.
The Chinese government welcomes and appreciates your participation.