China plans to levy a resources tax on coal based on sales value instead of production volume, as well as scrapping arbitrary levies on coal miners starting from December 1, taxation and fiscal authorities said over the weekend.
Taxes remained high on the agenda of Chinese policymakers last year as the government attempted to strike a new balance by supporting small businesses, high-technology sectors, and services industries. The tax rates will be decided by provincial governments within a range of 2 and 10 percent, and will be submitted to central authorities for approval, the Ministry of Finance and the State Administration of Taxation said in a joint statement released on Saturday.
High-end service firms which include medical services and the catering industry will be levied consumption tax for the first time, passing the cost to consumers, who are often from high-income class, to narrow the income gap, Jiang Zhen, a research fellow at the National Academy of Economic Strategy under the Chinese Academy of Social Sciences (CASS), told the Global Times on Monday.
Following regional experiments since the beginning of 2012, the VAT reform in transportation and some modern service sectors was rolled out throughout the country on Aug. 1, 2013. The program was expanded to railway transportation and postal services in Jan. 1, 2014 and further to the telecommunications sector in June 1.
