The process of replacing business tax with value-added tax has now been completed, as the State Council, China's Cabinet, announced on Friday that the business tax that has been in place for 60 years in China has been abolished.

Replacing the business tax with value-added tax is a significant move of supply-side structural reform, as it remarkably reduces the tax burden on enterprises, increasing market vitality. It will play a big role in promoting China's economic upgrading.

The business tax was the third major tax in China's taxation system, with the overall revenue from the accumulated tax nationwide about 2 trillion yuan ($303 billion).

A pilot program for replacing the business tax with value-added tax was launched in Shanghai in 2012. It was expanded nationwide on May 1, 2016.

Statistics show that since that date to Sept 2017, the accumulated revenue from value-added tax was 1.06 trillion yuan from May 2016.

According to officials of the State Council, the Ministry of Finance and the State Administration of Taxation, the revised regulation on value-added tax will be made law in the future.