China says its experiment with VAT reform well underway
China says its experiment with VAT reform well underway
China’s State Administration of Taxation said Wednesday its experiment with value-added tax (VAT) reform has achieved positive results in northwest China since it was launched last year.
The experiment, which moves the tax from production to tax on consumer spending has encouraged northeast China to increase investment in machinery and equipment and phase out outdated equipment.
Experts say a consumption-type VAT means tax cuts for manufacturing companies as they would be allowed to have tax rebates on the tax levied on expenditures of raw materials and fixed assets.
The experiment was launched in July 2004 and it brought in tax revenues of 1.27 billion yuan (about 159 million US dollars) from July and November of that year.
The VAT collected 1.47 billion yuan in the first half of this year in the region, including the provinces of Liaoning, Jilin and Heilongjiang.
More: english.people.com.cn