The spread of value added tax (VAT) on all sectors of the economy of China will allow the government to reduce the tax burden on business worth over 500 billion yuan (about $77,3 billion), said Premier Li Keqiang.
The government of China from 1 may will replace the tax on economic activities tax on VAT for the remaining four industries: Finance, construction, real estate and consumer services, reports TASS.
In the construction and real estate VAT will be 11%, and in Finance and consumer services – 6%.
“Replacement of the tax on economic activity on VAT is a key factor in ensuring effective active fiscal policy. It is also important to promote structural reforms this year, especially those areas that are aimed at stimulating supply in the market”, – quotes the newspaper China Daily.
The head of the government of the PRC explained that the authorities have laid the increase in the budget deficit for the current year to 560 billion yuan (about us $86,5 billion) to 2.18 trillion yuan ($336,5 billion) to cover the reduction in tax revenues from future reform.
