Implementing large-scale tax cuts will give a zeal to entities
Chinese Premier Li Keqiang yesterday stressed the implementation of larger-scale tax cuts to further boost the vitality of market entities.
Li made the remarks at a symposium held during his inspection at the Ministry of Finance and the State Taxation Administration.
Li said this round of tax cuts must ensure that the tax burden on major industries such as the manufacturing sector is decreased significantly and lowered to various extents in some industries.
“All industries will see their taxes go down, not up,” Li said.
The government will work out targeted solutions to solve potential tax burden rise as a result of a decrease in input tax deductions in some industries, the premier added.
Li said the government must live on a tight budget to support the tax cuts. Except for those projects that must be done and key programs, the central fiscal authority will cut its expenditures by 10 percent, he said.
Local governments should also resolutely cut general expenditures and improve the efficiency of existing resources, Li said.
The central government should increase the transfer payments to local governments, especially the fiscal authorities in the central and western regions.
Authorities yesterday announced detailed measures to implement the country’s value-added tax reform to further reduce the tax burden on various industries.
Starting April 1, taxpayers that are subject to the 16 percent VAT rate on their taxable sales or imported goods will enjoy a 13 percent VAT rate, while those who are subject to the 10 percent VAT rate will only need to pay 9 percent, according to a joint statement released by the finance ministry, the taxation administration and the General Administration of Customs.
Buyers of agricultural goods who are subject to a 10 percent deduction rate, which is used to calculate input VAT, will be subject to a 9 percent deduction rate, according to the statement.
The statement also laid out a series of supporting measures for VAT reform such as the extension in the scale of goods and services eligible for input tax deductions.