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Business / Economy

Tax reform reduces enterprises' burden

By Zheng Yangpeng (chinadaily.com.cn) Updated: 2012-10-30 16:55

Reform of turnover tax would reduce 95 percent of the trial enterprises'tax burden, an official from East China's Zhejiang province said on Monday at a news conference.

Zhejiang is one of the 10 provinces and cities that were included in the reform scheme in July. The decision was made after Shanghai implemented the reform at the beginning of this year. It replaced what is known as turnover tax with a value-added tax on selected services.

A turnover tax is a tax on gross revenue while a value-added tax is a tax levied on the difference between a commodity's price before the application of other taxes and the cost of producing it. The policy change is expected to reduce the repeated taxation on the transportation, services, research and development sectors.

The reform in Zhejiang, which will start on Dec 1, 2012, is expected to reduce 95 percent of the trial enterprises' tax burden. Except for transportation, which would see a generally unchanged tax charge, enterprises in other involved sectors would enjoy 40 percent lower taxes, said Luo Shilin, deputy director of Zhejiang provincial department of finance.

The reform is also expected to cost 6 billion yuan ($954 million) in provincial fiscal revenue in 2013, Luo said.

Other provinces and cities that have been included in the reform are Beijing, Tianjin, Guangdong, Jiangsu, Anhui, Fujian, Hubei, Xiamen and Shenzhen.

zhengyangpeng@chinadaily.com.cn

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