More Chinese provinces apply for VAT reform trials

BEIJING - More Chinese provinces have applied for piloting the value-added tax (VAT) reform to reduce burdens on businesses, finance and tax authorities have said.

More than ten provincial-level regions including Hebei, Henan, Shandong, Jiangxi, Hunan and Xinjiang have made the application, according to officials from the Ministry of Finance (MOF) and the State Administration of Taxation who declined to be identified.

The reform, replacing the turnover tax with a value-added duty in transport and some service sectors, had reduced taxes of over 40 billion yuan (6.4 billion US dollars) for more than 1 million taxpayers in the current 12 pilot regions as of February 1, the MOF said earlier this month.

Turnover tax refers to a levy on the gross revenue of a business. VAT refers to a tax levied on the difference between a commodity's price before taxes and its cost of production.

China introduced the reform in Shanghai last year to avoid double taxation. The program was later expanded to another 11 regions, including Beijing, Tianjin and Shenzhen.

The 12 pilot regions now combine to account for half of the national economic output and 56 percent of the country's total tax revenue, according to the MOF.