On April 30, the State Council issued a circular to fully implement the trial program of replacing business tax with value-added tax (VAT) starting May 1, 2016.

The trial program of replacing business tax with VAT is an important part of promoting structural reform, especially supply-side structural reform, according to the circular. The program is also a major measure to cut tax during the implementation of a proactive fiscal policy, it added.

The State Council urged related departments paying close attention to the tax replacement trial program and to further strengthen the leadership.

Governments at all levels should make full use of the internet and big data technologies to follow the tax replacement trial program closely. They are urged to learn from their experiences, optimize procedures, enhance supervision, and strengthen risk prevention and control, the circular said.

The circular also made it clear that relevant departments should strictly comply with the laws and regulations. Tax which shouldn’t be levied have to be returned to taxpayers. Enterprises shouldn’t seek unjust interest by misinterpreting polices.

The State Council called to implement the tax cut policy in a smooth and stable way to ensure all enterprises enjoy the benefit of the reform through the trial program. Reports should be made to the State Council in case of important issues, according to the circular.