China Moves Toward Value-Added Tax: Laying the...
China Moves Toward Value-Added Tax: Laying the cornerstone for its biggest tax changes in four decades of communist rule, the government set out rates for a value-added tax, a consumption tax on luxury goods and a turnover tax on services. The VAT, which Beijing expects to be its main source of revenue in the future, will be levied at 17% for most products, according to three provisional regulations printed in the official People’s Daily. Beijing says the three commercial taxes, to be levied on domestic enterprises from Jan. 1, simplify a hodgepodge of existing levies and will not increase tax burdens or aggravate inflation, which is running at more than 20% in major cities, an editorial printed beside the regulations said. Foreign companies in China will be subject to the new taxes.
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