A new value-added tax rate adjustment came into effect on April 1 to cut the value-added tax rate of the manufacturing industry from 16% to 13%, and the value-added tax rate of the transportation and construction industries from 10% to 9%.
1.28 million industrial taxpayers in Jiangsu will benefit from the new round of VAT rate adjustment, accounting for one-tens of the national total.
Meantime, many industries including electricity, auto and cargo train service have lowered their prices following the country's VAT reform measures. Apple has also reduced prices of its products including iPhones, iPads and laptops.
Last month, Chinese authorities announced detailed measures to implement the country's VAT reform to further reduce the tax burden on various industries.
Starting April 1, taxpayers that are subject to the 16-percent VAT rate on their taxable sales or imported goods will enjoy a 13-percent VAT rate, while those who are subject to the 10-percent VAT rate will only need to pay 9 percent, according to a joint statement released by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs.
According to this year's Government Work Report, the VAT rate for the manufacturing sector will be cut by three percentage points to 13 percent. For construction and related sectors, the VAT rate will be reduced by one percentage point to 9 percent.
VAT, a major type of corporate tax derived from sales of goods and services, is China's largest tax category, also one of important sources of tax revenue. Last year, China's VAT revenue totaled 6.15 trillion yuan, accounting for nearly 40 percent of the total.
If VAT rate is cut by one percentage point, it could reduce tax burden of enterprises of 41 million yuan, said trade insiders.
China plans to reduce the tax burden and social insurance contributions of enterprises by nearly 2 trillion yuan this year, according to the report delivered on March 5. Meanwhile, the country has set this year's GDP growth target at 6 to 6.5 percent.
