Tax relief for more mainland companies
The VAT system will gradually be introduced throughout the nation, says Li Keqiang
Vice-Premier Li Keqiang has pledged to expand a trial programme overhauling the tax system to more industries and regions, underlining Beijing's urgency in boosting businesses that are key to creating jobs.
The government aims to replace the business tax with a value-added tax for companies in more industries, including postal and telecommunications, railways and construction, Li said at a meeting last week and reported by Xinhua. He also reportedly vowed to expand the programme gradually to cover the whole nation.
While Li, expected to become the next premier after next month's leadership change, did not give a timetable for extending the reform, his comment reflects the government's determination to boost services and cut reliance on exports and investments over the next decade.
"The most important purpose of the reform is to significantly cut the tax burden for the services industry," said Liu Li-Gang, a senior executive at Australia & New Zealand Banking Group.
Shanghai started the VAT pilot on January 1.
The reform so far covers transport and some service industries such as information technology, research and development, culture and logistics.