Value-added tax re­form to save more than 500b yuan

China Daily (Canada) - - NEWS CAPSULE -

The tax­a­tion bur­den of Chi­nese en­ter­prises will be eased by an es­ti­mated more than 500 bil­lion yuan ($77.2 bil­lion) af­ter the wider im­ple­men­ta­tion of a pi­lot value-added tax re­form.

Four busi­ness sec­tors — con­struc­tion, real estate, finance, and con­sumer ser­vice — will be in­cluded in the re­form of busi­ness tax to value-added tax from May 1, ac­cord­ing to de­ci­sions made dur­ing the ex­ec­u­tive meet­ing of the State Coun­cil, China’s Cab­i­net.

The ex­ten­sion of

the tax-to-VAT is aimed to re­duce com­pa­nies’ tax bur­dens and sup­port the devel­op­ment of mod­ern ser­vice and man­u­fac­tur­ing in­dus­tries, ac­cord­ing to a news re­lease on the meet­ing, which was presided over by Premier Li Ke­qiang.

Ac­cord­ing to the re­lease, the price of new real estate pur­chases may be in­cluded in com­pa­nies’ cost of pro­duc­tion for tax ex­emp­tion. In the pre­vi­ous pi­lot project, ma­chin­ery bought by com­pa­nies was in­cluded in the cost of pro­duc­tion.

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