BEIJING — China will continue to improve its value added tax (VAT) policies to further ease the tax burden of companies, according to an executive meeting of the State Council.
The VAT system was rolled out nationwide in May in place of business tax after successful pilots. By the end of October, 96.5 billion yuan (about $14 billion) had been saved for companies, according to a statement released after a meeting chaired by Premier Li Keqiang on Nov 29.
All 26 economic sectors covered by the VAT program have seen their taxes reduced, said the statement, adding that finance, construction, real estate and livelihood services have been covered by the program.
The government estimates that a total of 500 billion yuan will be saved this year, taking into account tax reductions in pilot industries earlier this year.
Policymakers expect the new round of tax breaks to improve the overall tax system, help the development of service sector and other new economic drivers, and aid the nation’s economic transformation.
The government will keep a close eye on the program and address problems promptly, and make more efforts to cut business burdens and stimulate market vitality.
Besides, the central authorities will allocate tax rebates to local governments, instead of more returns for regions with higher tax revenues, to help local officials to meet the balance.
The attendees of the meeting also reviewed a report on the annual inspection of State-owned enterprises (SOE) administered by the central government.
The SOEs managed to end a 20-month turnover decline in September and October by means of downsizing and restructuring, which contributed to a stabilizing economy, the report said, but warned of budgetary and operational violations.
The government asked the SOEs involved to conduct internal overhauls, and vowed strengthened supervision over overseas State-owned assets.