Two more Chinese provinces, Jiangsu and Anhui in the country's east, started a pilot reform on October 1 to replace turnover tax with value-added tax (VAT) in the transport sector and some areas of the service industries, following Beijing, Tianjin and Shanghai.
The reform has been launched to lower the overall tax burden and boost involved sectors.
Turnover tax and VAT are two major tax categories in China. Turnover tax applies to a production process of a business with the tax rates varying from 3 to 15 percent depending on the sectors, while VAT is deduced from the difference between a commodity's price before taxes and cost of production.
According to a decision made in July at an executive meeting of the State Council, China's cabinet, the trial program will be expanded to more than 10 provinces and cities. |