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Tax reductions pave the way for structural reforms

cntv.cn | Updated: 2013-08-01 10:53

With just hours to go till China rolls out Value Added Tax reform nationwide, companies are getting ready for exciting changes, Yin Yue shows us how taxes can play a role in China's economic rebalancing. 

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Less tax, simpler taxation system this is China's goal of Value-added tax reform, which replaces business tax with VAT. Official figures show that in the first 5 months this year, companies have enjoyed substantial tax savings.

"So far the reform has saved 40.6 billion yuan for the nine participant provinces and cities." Lin Feng, Office of Service Tax & Commodity Tax, State Admin. of Taxation said.

The biggest winners are in the modern services industries. Not only are they saving taxes, but they are changing their businesses for the better.

"We speed up our research and development process to keep pace with the reform. In the first half of last year we set up a new research and development company. We also made changes to personnel and assets at the R&D arm. This year we will move even faster." Cai Lei, Vice President of Taxation, JD. com said.

The positive changes for Jing Dong, one of China's largest e-commerce companies are expected to be replicated at thousands of other service firms across China -- come August 1st.

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