Tax Policy Changes
In another measure designed to support small and mini-sized businesses, China increased the minimum taxable revenues for the value-added tax (VAT) and the business tax. For the VAT, the lowest tax bracket was lifted from RMB 2,000-5,000 per month to RMB 5,000-20,000 for cargo sales, and from RMB 1,500-3,000 to RMB 5,000-20,000 for services. For the business tax, the minimum bar was raised from RMB 1,000-5,000 to RMB 5,000-20,000. According to Zhang Peng, a research fellow with the Research Institute for Fiscal Science under the Ministry of Finance, while these changes benefit all enterprises, smaller businesses will get the largest tax relief.
Another change to China's tax regime came with the promulgation of the Provisional Regulations on Resource Tax, which entered into effect as of November 1, 2011. Under the new rules, levies for natural gas are to be measured by sales value and the rate is to be set at five percent. The rate for coking coal is to be RMB 8 per ton, up from RMB 0.3-5 per ton. Zhang Peng sees these new rules as encouraging industry to boost their production efficiency and strive for the sustainable use of limited natural resources. |