Tax reform in China will reduce the fiscal burden on business, premier believes

Almaty. April 5. Silkroadnews - Value added tax (VAT) allocated on all China’s branches of economy will allow the government to reduce the tax burden for business in the amount of more than 500 billion yuan (about $77.3 billion), the statement has been made by premier of the State Council of China Li Keqiang, TASS agency reports.

“Business tax replacement by VAT is a key factor to ensure the effective active fiscal policy. It is also important to boost the structural reforms this year, especially those directions which are aimed at market supply (stimulation),” the prime minister said.

The head of government of China said the authorities have made a special provision for increase in the budget deficit for current year to 560 billion yuan (about $86.5 billion) to 2.18 trillion yuan (about $336.5 billion) to cover decline in tax revenues from the future reform.

Since May 1, 2016, the government of China will replace the business tax by VAT for the remaining four sectors - finance, construction, real estate and consumer services. For construction and real estate VAT shall make 11%, for financial and consumer services it shall amount to 6%.