As the tax authority said, China's pilot program to replace business tax with value-added tax (VAT) reduced tax revenue by 191.8 billion yuan ($30.7 billion) in 2014, the tax authority said Wednesday. The country expanded the VAT reform to the railway transportation, postal and telecommunications sectors in 2014, with the latter three sectors covering a total of 26,833 taxpayers, Guo Xiaolin, a spokesman of the State Administration of Taxation, told a press conference in Beijing.
Around 2.7 million enterprises were covered by the VAT reform by the end of last year, up 160 percent from the end of 2012, the statement said. By the end of 2013, the reform reduced tax burdens for companies by more than 140 billion yuan (22.83 billion U.S. dollars), up from 42.6 billion yuan in the previous year, according to the MOF. "With the progress of the pilot program, the policies concerning the trials and management measures have gradually become mature," the statement said.
VAT reform is part of a tax reduction package to facilitate economic restructuring. One third of taxpayers in Guangdong have optimized their business structure by delineating businesses in the service sector and the secondary sector. VAT reform will soon be expanded to sectors like construction, real estate and insurance, which is expected to generate another eight million VAT taxpayers.
