China plans $14.6 bn tax-cut package
China is considering a 100 billion yuan ($14.6 billion) tax cut as part of a finance reform package, the 21st Century Business Herald reported on Wednesday.
By Agencies |
BEIJING: China is considering a 100 billion yuan ($14.6 billion) tax cut as part of a finance reform package, the 21st Century Business Herald reported on Wednesday. The cut would accompany a shift in the country���s value-added tax (VAT) system from the current production-based levy to a consumption-based system that is the norm in most countries. Some economists have said the government may lower taxes to deliver a fiscal boost after China���s growth slowed to 10.1% in the second quarter from 11.9% last year.
The Chinese-language newspaper said the reform may be implemented at the start of 2009. Citing unnamed sources, it said that the Ministry of Finance recently submitted a draft proposal to the State Council. The VAT reform, which would allow firms to write off core investment expenses from their tax bills, has already been tried on a pilot basis in a handful of provinces. Finance officials from across the country will meet in September to discuss the proposal, the newspaper said.
Separately, assistant finance minister Zhu Guangyao said China would adjust customs tariffs next year to help guide the economy as difficulties mount.In comments on the finance ministry website, Zhu said tariffs would play an important role in managing China���s foreign trade and could also boost the central government���s revenues. He did not elaborate.
The Chinese-language newspaper said the reform may be implemented at the start of 2009. Citing unnamed sources, it said that the Ministry of Finance recently submitted a draft proposal to the State Council. The VAT reform, which would allow firms to write off core investment expenses from their tax bills, has already been tried on a pilot basis in a handful of provinces. Finance officials from across the country will meet in September to discuss the proposal, the newspaper said.
Separately, assistant finance minister Zhu Guangyao said China would adjust customs tariffs next year to help guide the economy as difficulties mount.In comments on the finance ministry website, Zhu said tariffs would play an important role in managing China���s foreign trade and could also boost the central government���s revenues. He did not elaborate.
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