China works to replace turnover tax with VAT
Updated: 2011-10-27 09:17
BEIJING -- The State Council, or China's Cabinet, on Wednesday approved a pilot program to replace turnover tax with a value-added tax (VAT).
The government will replace turnover tax with a VAT on select service sectors, such as the transport sector, in Shanghai from Jan 1, 2012, said a statement issued after a State Council meeting presided over by Premier Wen Jiabao.
If the pilot program is successful and the conditions are right, the policy will be extended to some service businesses nationwide, it said.
The reform aims to incrementally replace turnover tax with a VAT in all sectors nationwide, it said.
Turnover tax refers to a tax on the gross revenue of a business, while a VAT refers to a tax levied on the difference between a commodity's price before taxes and its cost of production.
The policy change is considered a taxation reduction, especially for the service sector.
Current VAT rates include two ranks, 17 percent and 13 percent. According to the statement, the government will also add two lower ranks, 11 percent and 6 percent.
Furthermore, a draft amendment to the regulation on fodder and fodder additives was passed at the meeting in order to address the abuse of fodder additives.
The draft has allowed authorities to publicize fodder producers who violate safety rules and to issue tougher punishments to violators.
China's tax revenue up 27.4% in Jan-Sept 2011-10-21 08:59
Ministry stands firm on minimum taxation threshold 2011-06-28 13:32
Services remain in dire need: NGOs 2011-10-08 08:09
- China's industrial profits growth slows
- Chinese firms optimistic about economic outlook
- Sheep feed tainted with clenbuterol
- Ministers vow to build better road, rail links
- TV regulation may hurt profits
- Tide turns against businesses
- China committed to gradual currency reform
- Turnover tax set to be replaced by VAT