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  3. China 'Has Slashed Business Taxes By CNY2.5tn Since 2012'

China 'Has Slashed Business Taxes By CNY2.5tn Since 2012'

Mary Swire, Tax-News.com, Hong Kong

06 February 2018


The Chinese tax administration has reported that businesses have saved CNY2 trillion (USD317.8bn) following the replacement of business tax with value-added tax, beginning in 2012.

Further, tax incentives for entrepreneurs and innovative companies cut the tax burden by a further CNY500 billion (USD79.4bn) in 2017.

The announcement came alongside figures from the agency that tax revenue collections were up 8.7 percent year-on-year, compared with growth of 4.8 percent in 2016.

The replacement of business tax with VAT was first piloted in 2012 and expanded nationwide in 2016. It removed the cascading nature of the business tax and allowed business to obtain input tax credits for the tax they incurred in acquiring inputs for onward supplies. According to figures provided to the state news broadcaster Xinhua, businesses saved a total of CNY918.6bn (USD146bn) in tax as a result of the reform, an increase of CNY345 billion (USD54.8bn) compared with 2016.

TAGS: tax | business | value added tax (VAT) | tax incentives | entrepreneurs | China | tax credits | tax reform | Tax

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