Premier Li Keqiang has urged efforts to continue implementing the value-added tax (VAT) reform, including cementing the changes in laws and regulation.
The major reform was discussed at the State Council executive meeting on Aug 18.
About 850 billion yuan ($127 billion) has been reduced since the VAT reform was rolled out nationwide 13 months ago.
“We need to consolidate and expand our achievement to optimize economic structure and bring more benefits to enterprises and the general public, “ Premier Li said.
China’s VAT reform has been praised internationally.
An IMF financial adviser said China’s VAT reform was a great practice, and the deep and positive effects will show as time goes by.
The Wall Street Journal reported that the VAT reform is China’s largest tax reform in the last 30 years.
According to Bloomberg, China’s VAT reform will not only support the nation’s economic growth in the short term, but also help realize a balanced development and better economic structure in the long run.
Just a month ago, China’s VAT rate structure was cut from four to three tiers and tax rates for farm produce, tap water and books were reduced from 13 percent to 11 percent.
Premier Li said the VAT reform will create a simpler tax system and reduce burdens for market players, allowing them to earn more and hire more.
“The VAT reform program is a strong measure of administration to boost proactive fiscal policies and supply-side structural reform,” the Premier said.
The ongoing VAT reform will inevitably hamper the interests of all sides involved, but it can be successfully implemented as long as we promote it in a steady and prudent way, the Premier noted.
He urged related departments to learn from the experiences of the pilot reform, guarding against any deviation in pushing forward reform policies.
“Efforts should be made to help taxpayers better understand and make good use of related policies, simplify tax procedures and promote electronic invoices to provide efficient and convenient tax services,” the Premier stressed, adding that these efforts are key to further improving the business environment and unleashing market vitality.
The Premier also expected the reform would address the unreasonable tax structure and collection methods, and solve increased tax on some taxpayers.
“We should continue to improve VAT policies in manufacturing, finance and construction industries, complete tax deduction chains, and further optimize the tax rate structure”, the Premier said.
He also stressed the need to speed up the process of enacting, amending or repealing laws and regulations in accordance with the process of VAT reform, and put the achievements of the VAT pilot program into legal norms for the benefit of more enterprises and people.