Beijing, May 1: Chi has replaced all business tax with value-added tax (VAT) after extending the policy to cover the construction, real estate, fince and consumer services sectors on Sunday. They were the last four sectors still taxed based on their revenue.
VAT refers to a tax levied on the difference between a commodity’s price before taxes and its production cost. Revenue tax refers to a levy on a business’s gross revenues.
The expansion of the VAT scheme is expected to ease tax burdens by more than 500 billion yuan ($76.9 billion) this year.
Chi’s service sector is increasingly picking up the slack of manufacturing as the world’s second-largest economy is shifting towards a more sustaible growth driven chiefly by consumer demand. (IANS)