Beijing is improving its tax overhaul, its most ambitious reform in more than two decades. Photo / 123RF
Beijing has pledged to cut red tape and improve China's tax regime as part of its ongoing value-added tax (VAT) overhaul, the country's most ambitious tax reform in more than two decades.
The overhaul was extended to the four remaining sectors of finance, construction, property and consumer services, on May
1, 2016, so the reform now covers all industries. The VAT progressively began to replace the business tax since a trial run in Shanghai in 2012.
The reform was touted as easing the tax burden of all industries as it is collected incrementally based on the surplus value added at each stage of production, compared with the business tax that was levied on gross revenue.
In the future, China will address issues including improper tax rate structure and the problem where a small number of taxpayers face a higher tax burden due to insufficient tax offsetting items, according to a statement posted on the central government's website on Friday, quoting a State Council meeting presided over by premier Li Keqiang.
The government said earlier that although the overhaul trims tax for all sectors, there were still 2 per cent of taxpayers who didn't benefit from tax cuts.
