App | Old Version | 中文 |
HOME >> NEWS >> TOP NEWS

VAT reform affects all sectors

Updated: Dec 8,2016 3:55 PM     english.gov.cn

Replacing the business tax with a value-added tax (VAT) is an important part of a more proactive financial policy as huge efforts are being made to promote supply-side structural reform of the world’s second-largest economy.

Since May 1, the taxation reform has been carried out across China with tests extended to four more sectors -- construction, real estate, finance, and life services.

The move is not a simple policy measure given the scale of the tax break.

According to estimates, the reform of replacing the business tax with a value-added tax will reduce tax payments in 2016 by more than 500 billion yuan ($72.7 billion).

Premier Li Keqiang put forward in his government work report in early 2016 that the comprehensive implementation to replace the business tax with a value-added tax must ensure real tax reductions in all sectors.

Solid implementation of the tax reform was the fundamental target when the Ministry of Finance and the State Administration of Taxation designed and executed the policy measures, said Shi Yaobin, vice-minister of finance.

The Ministry of Finance and the State Administration of Taxation also closely followed up on the development of tests such as traffic toll reductions and tax reductions for labor dispatching services.

The comprehensive implementation of replacing the business tax with a value-added tax involves more than 10 million tax payers, a mission that is huge and time-sensitive, according to Wang Lujin, chief accountant at the State Administration of Taxation.

To accomplish a successful taxation transformation, the tax administration has published related policy documents and training materials, and strengthened taxation cooperation between local and national tax bureaus.

So far, 8,568 joint tax service offices have been established, with 17,386 new tax windows opening and 20,338 new tax payers involved.

The tax change provides convenience and reduced tax burdens for businesses in many sectors.

With the new tax reform, agricultural products such as vegetables, meats and eggs, among the main business costs for a hotel, can enjoy tax reductions, and 28 percent of the tax burden has been reduced since May, according to Zhang Chunliang, a hotel operator in Shandong province.

The tax reform also affected the real estate sector, as storage of commercial residential buildings has been greatly reduced in Xinyu city of Jiangxi province.

Statistics indicate that from May to October, almost 372 billion-yuan in taxes has been reduced for all sectors under the reform.

VIDEOS