Fujian & Guangdong join to pilot on VAT

China is currently implementing a pilot program to replace the business tax with a value-added tax or VAT, and aims to widen it across the country.

Starting Nov 2, China's Fujian and Guangdong provinces are taking part in the VAT reform. In December, the scheme will also be extended to more provincial regions and cities such as Hubei and Zhejiang provinces.

In 2011, the business tax accounted for 15 percent of the government's total tax revenue, while the VAT took up 27 percent.

The tax reform aims to alleviate the tax burden on companies and encourage industry upgrading.

Shanghai was the first city to implement the pilot program at the beginning of this year.