On March 18, Premier Li Keqiang presided over a State Council executive meeting to deploy tasks regarding this year’s development targets, economic system reform, and policy of replacing business tax with value-added tax.

The meeting noted that the Government Work Report approved by the 12th National People’s Congress is the “blueprint” for the State Council, and stipulated several major tasks for related government departments.

First, on the basis of new development philosophy and the 13th Five-Year Plan, efforts should be made in further comprehensive reform, creating new driving forces, developing the new economy, promoting traditional driving forces, improving people’s livelihoods, and strengthening environment protection.

Second, financial and monetary policy tools should be made full use of to prevent all kinds of risks and deal with complicated situations.

Third, responsibilities should be clear and supervision should be strengthened to make sure this year’s economic and social development targets will be successfully accomplished, ensuring a good start of the 13th Five-Year Plan period.

After hearing the report of priorities of economic system reform in 2016, the meeting set up 50 key reform tasks in 10 sectors including government function transformation, tax and finance, State-owned enterprises, agriculture and rural areas, opening up, and social service.

It stressed structural reform, especially the supply side reform, is important in promoting system innovation that helps create new supply and release new demand.

First, it proposed further streamlining administration and delegating power to lower-level governments, appropriate regulation, optimizing reforms in service and key industries; improving systems and mechanisms that help reduce overcapacity, storage, leverage ratio, and costs; and further advancing mass entrepreneurship and innovation and creating new sustainable driving forces.

Second, it proposed improving people’s livelihood in education, medical care, elderly care service, and urbanization; increasing people’s income and sense of achievement by accelerating system innovation in employment, pension, and poverty alleviation and improving mechanisms regarding basic public service investment and income distribution.

Third, it proposed enhancing supervision system and mechanism, preventing risks in food, environment protection, and finance sectors.

To implement the policy of replacing business tax with value-added tax, the meeting decided to further reduce burdens of companies and promote transformation and upgrade of economic structure. The mission will start from May 1.

First, trials of replacing business tax with value-added tax will further cover industries of construction, real estate, finance, and services, supporting the modern service industry development and manufacturing industry upgrade.

Second, to further reduce business burdens and boost effective investment, newly added immovable properties will be included in the tax deduction range, on the basis of a situation where value-added tax of machinery equipment bought by companies have been reduced.

In addition, previous preferential business tax policies on industries that have been included in the new tax policies will continue; transitional measures will be adopted in specific industries; policies of zero tax rate or tax exemption will be carried out for service export.

The aim of these measures is to make sure that tax burdens of all industries will be reduced. According to an estimation, the policy of replacing business tax with value-added tax will reduce company’s tax burden of more than 500 billion yuan ($77.3 billion).