China's value-added tax reform is expected to be implemented1 across all industries next year.
中国增值税改革有望于明年在全行业实施。
Business taxes in four
sectors2 - finance, construction, property and consumer services - will be replaced by
VAT4.
Business tax refers to a
levy5 on the gross revenue of a business, while VAT refers to a tax
levied6 on the difference between a commodity's price before taxes and its cost of production.
It's been predicted that once all industries shift to VAT in 2016, the overall tax
savings9 nationally will be more than 900 billion yuan or 0.4 percent of GDP.
In addition, VAT can promote the development of the service
sector3 and the upgrading of the manufacturing sector.