BEIJING — Chinese businesses will see further tax reductions in the next year as a result of the newly value-added tax (VAT) system, an official said on Dec 27.

China’s VAT was introduced nationwide in May to replace business tax.

The new tax saved businesses 470 billion yuan ($68 billion) in the first eleven months of the year, on track to meet the government’s end-of-year target of 500 billion yuan.

Speaking at a press conference jointly held by the State Administration of Taxation (SAT) and the Ministry of Finance, SAT director Wang Jun said cited three factors which could lead to bigger reductions in 2017: Construction, property, finance and services sectors were not covered in the first four months of this year; the rules on tax of real estate purchases will be changed; and there will be better management of tax policy.

From May to November, combined industrial profits increased 10.1 percent year on year, against 1.4-percent losses in the same period in 2015.