On September 1 Beijing will become the second city to implement the tax eight months after Shanghai.
China’s VAT reform programme, which was first piloted in Shanghai, sees VAT and business tax merged into a single tax. Businesses have widely welcomed the reform, which shifts the burden of taxation from them to consumers.
“Given the current business tax born by our company, VAT would significantly lighten our load in terms of tax burden,” said Christina Liu, finance controller at recruitment firm Hays, who is eager to the pilot expanded to other cities.
Around 138,000 taxpayers in the transportation and modern-service sectors, which are subject to business tax, will benefit from the reform to the tune of $2.6 billion.
The government is also looking to extend the pilot to Tianjin, Shenzhen and Xiamen, as well as the provinces of Guangdong, Jiangsu, Zhejiang, Anhui, Fujian and Hubei. More areas will be added next year as China looks towards a nationwide roll-out.
