China completes implementation of VAT scheme

Beijing, May 1 ,2016 : China on Sunday replaced all business tax with a value-added tax (VAT) after extending the policy to cover four new sectors of construction, real estate, finance and consumer services, as part of reform agenda to halt economic slowdown in the world’s second biggest economy.

The inclusion of the four remaining sectors will bring almost all goods and services under the VAT cover and is expected to save Chinese businesses billions of dollars.

VAT refers to a tax levied on the difference between a commodity’s price before taxes and its production cost.

Revenue tax refers to a levy on a business’s gross revenues.

The expansion of the VAT scheme is expected to ease tax burdens by more than 500 billion yuan (USD 76.9 billion) this year.

@Agency report.