February 28 2019

China to Further Lower VAT Rates

The 13th National People's Congress opened its second session on March 5, 2019 in Beijing. Premier Li Keqiang delivered a report on the government work, and he said China would implement a larger scale of tax reductions in 2019.

He said China will introduce both general-benefit and structural tax cuts, focusing primarily on reducing tax burdens on the manufacturing sector and on small and micro businesses. China will reduce the current value-added tax rate of 16 percent for manufacturing and other industries to 13 percent, and lower the rate for such industries as transportation and construction from 10 percent to 9 percent. Supporting measures, like increased tax deductions for producer and consumer services, will be taken to make sure that tax burdens in all industries do not go up.