Tuesday, October 23, 2012

China to expand VAT reform to more firms: vice premier

BEIJING (Reuters) - China will expand its value-added tax reform to more industries including telecommunications, railways and construction and make it nationwide, Vice Premier Li Keqiang was quoted as saying by the official Xinhua news agency.

Li, widely regarded as China's premier-in-waiting, made the remarks at a recent conference, Xinhua said.

The government, which has been working to revamp its outmoded tax regime and help reduce costs for business, launched a trial tax reform in Shanghai a year ago to replace a business tax with a value-added tax for firms in the transportation and service industries.

China's cabinet said in July that the scheme was set to expand to more cities and provinces from August, with Beijing starting the reform on September.

"With the expansion of VAT scheme, more medium-and-small sized companies will benefit," Li was paraphrased as saying by a Xinhua report on Sunday.

China will implement the reform in post and telecommunications, railway transportation and construction industries at an appropriate time, Li added.

Chinese manufacturers currently pay a value-added tax levied on profits, while firms in the services sector pay a business tax based on sales revenues.

The current tax system has drawn criticism because some goods end up getting taxed by both the value-added tax and business tax.

(Reporting By Xiaoyi Shao and Kevin Yao; Editing by Nick Edwards)

Source: http://news.yahoo.com/china-expand-vat-reform-more-firms-vice-premier-020950691--business.html

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