The Administration of Taxation in Xi’an High-tech Zone launches the campaign of replacing the business tax with VAT (3)

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The replacement stimulates the inherent vitality of enterprises

As is known, in order to eliminate the tax differences between pilot areas and non-pilot areas and further implement structural tax break policies, the State Council decided in early April this year that the tax transformation should be expanded to transport and some modern service industries since August 1 this year.

In accordance with the requirements of State Administration of Taxation, the taxable services in pilot areas include: land transport services, marine transportation services, air transport services, pipeline transportation services, R&D and technical services, information technology services, cultural and creative services, logistics support services, leasing services of tangible movable properties, forensic consulting services, radio, film and television services.

After the tax reform, taxable service rates of general taxpayers are as follows: 17% for providing tangible movable property leasing services; 11% for providing transportation services; 6% for providing part of the modern services; and 3% for small-scale taxpayers.

According to the introduction by Mr. Wu, the popularization of the replacement across the nation made the tax system much fairer through the complete elimination of the policy differences, and the withholding tax chain more complete, from which more companies would benefit. As a key work of fiscal tax reform, the replacement will help simplify and standardize the tax system, eliminate double taxation and lighten enterprises’ burden, thus playing an important role in innovative system construction. From a deeper perspective, it will accumulate “strong power source” for future economic development, accelerate the growth of modern service sector in particular. Industrial transformation and upgrading as well as industrial structure optimization will also be realized, while SMEs will enjoy broader space for development. For Xi’an High-tech Zone where 13 enterprises are newly established every day on average, this replacement policy is undoubtedly a timely help.

In conclusion, the replacement has invigorated enterprises, helped form a new growth point, increased the employment opportunities and people’s income, and promoted sustained and healthy development of the economy as well. Besides, it is also of great significance for the country’s economic structural adjustment and economic restructuring and it helps achieve stable and sustainable economic increase and meanwhile facilitate effective development of the service industry and make it more competitive.

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