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China cuts over 900b yuan in tax via VAT reform in 2017

Xinhua | Updated: 2018-02-02 11:30
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BEIJING - China made further headway in cutting tax for enterprises in 2017 via its ongoing reform to replace business tax with value-added tax.

A total of 918.6 billion yuan ($145.98 billion) was saved last year via the VAT reform, an increase of 345 billion yuan compared with 2016, according to the State Administration of Taxation.

As the most significant tax overhaul for two decades, VAT is replacing business tax which has been in place for 60 years, streamlining procedure, and avoiding repetitive taxing. It was piloted in Shanghai in 2012 and expanded nationwide in May 2016.

The administration attributed the increase in tax reduction to policy adjustments and increasing acceptability of VAT reform practices.

Meanwhile, the tax reduction policies targeting small businesses with thin margins helped save them 45.4 billion yuan.

China also rolled out taxation preferential policies last year for high-tech small and-medium-sized enterprises as well as start-ups to encourage entrepreneurship and innovation.

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