The Chinese government will continue to lower the value-added tax rate for the industries of manufacturing, transportation, construction, telecommunication, with the intent of cutting a total 240 billion yuan (US$38.17 billion) in tax for the year ahead, Yicai.com reported.
The State Council executive meeting on Wednesday decided to decrease the VAT rate for the manufacturing sector from 17% to 16%, while reducing that of the transportation, construction, telecommunication sectors and agricultural products from 11% to 10%.
Meanwhile, industrial and commercial enterprises whose annual sales are less than five million yuan are defined as small-scale VAT taxpayers, updating from the previous 500,000 to the 800,000 yuan standard.
It also allows companies that have registered as general taxpayers to transfer to small-scale taxpayers, so as to enjoy preferential tax rates.
In the past five years, a total 2.1 trillion yuan of tax has been unloaded through the implementation of VAT reform.