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China to replace business tax with VAT

January 26, 2016

Chinese Premier Li Keqiang said recently that China will expand tax reforms to replace a business tax with a value-added tax (VAT) this year, which is considered the latest step to boost the country’s economy. 

Li said the move aims to reduce corporate tax burdens by cutting large-scale taxes for companies.

The government has promised to expand tax reform to real estate construction, financial service and consumer services sectors. VAT has been applied to railway transportation, postal services, telecommunications and some service sectors in China.