China will continue value-added tax reform in an attempt to boos the economy through tax cuts.
VAT reform is a key part of supply-side economic reform and has made good progress, according to a statement released after a State Council executive meeting presided over by Premier Li Keqiang.
The most aggressive tax cuts in years have saved 1.6 trillion yuan (244 billion U.S. dollars) of taxes for business owners. From May 2016 to June 2017, taxes were reduced by over 850 billion yuan.
The reform streamlines the tax system, reduce double taxation, helps innovation and industrial upgrading and while boosting employment. It shores up the economy and gives new impetus for the economy to grow at a medium to high rate or higher level, according to the statement.p The government will further streamline taxation procedures and introduce information technology to make them easier and more efficient.
It will also improve the situation in sectors including manufacturing, finance and construction, optimize tax structure and set a reasonable tax rate.
Laws will be revised as soon as possible to reflect the new system.
China has been trying for years to reduce business costs. May 1 was the first anniversary of VAT reform, which replaced all business taxes with value-added tax, the most significant tax overhaul for two decades.