As of May 1, 2016, China will completely roll out the reform program to replace the business tax with a value-added tax(VAT) and incorporate building industry, real estate industry, financial industry, lifestyle service industry as the last pilot sectors into the program. Guangdong’s pilot replacing business tax with VAT over the past three years has accumulated valuable experience for the country’s fiscal system reform. Now the reform dividends are gradually released. From today on, Nanfang Daily issues a report series Focusing on Guangdong’s Front for Replacing Business Tax with VAT and expects your concern.

 

Guangdong is a province that carries out pilot replacing business tax with VAT early. Over the past three years, the province’s sectors that carry out the pilot program achieved booming development thanks to the action. The program not only bridged the gap of some stagnant industries, but also offered great power for keeping the province’s economic growth stable.

Quite a few taxpayers worried about if the reform would increase tax burden prior to the pilot operation. As a result, the structural tax reduction realized in the three-year-long pilot operation has benefit various sectors. According to statistics of the provincial financial department, by the end of 2015, the total tax reduction of ordinary taxpayers and small-scale taxpayers covered by the pilot program reached RMB95.313 billion yuan, including RMB 60.556 billion yuan from taxpayers directly involved in the pilot operation. The pilot program reduced tax for 98.2% taxpayers, offered offset tax reduction of RMB27.571 billion yuan for former VAT payers and achieved export tax rebate and exemption of RMB7.186 billion yuan.

 

Source: Translated from Invest Guangzhou, April 27, 2016