At the meeting, as a follow up to the Yuan200 billion tax reduction measures put in place in the first quarter of the year, the additional measures that were decided upon are as following:
Beginning from July 1 this year, VAT (Value-Added Tax) rate brackets will be reduced from 4 to 3, pegged respectively at 17 percent, 11 percent and 6 percent, while the bracket of 13 percent has been cancelled. It is expected that this initiative will effect a further tax reduction of over Yuan380 billion in favor of all market players and promote growth in the real economy.
According to provisions of Item 2 of Article 4 of the Provisional Regulations of the People‘s Republic of China on VAT issued under ref GWY-538, tax payers are subject to a 13 percent tax upon import or sales of the following goods. This means that VAT for natural gas, pesticides, fertilizers and farm machinery will be brought down to 11 percent now with the cancellation of a 13 percent tax.