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Vice-premier urges structural upgrades

China Daily | Updated: 2012-10-22 07:47

Li calls for tax reforms to alter growth pattern

Vice-Premier Li Keqiang has urged more taxation reforms and structural tax cuts to boost industrial upgrading and the transformation of the economic growth pattern.

Li made the remarks at a meeting on Thursday on expanding trials of replacing the business tax with a value-added tax.

The adjustment in taxation is an important part of the country's fiscal reform and a key measure to stabilize growth and adjust economic structure and the government should accelerate the promotion of such measures to benefit more enterprises, Li said.

China implemented tax-cutting measures at the beginning of this year, including a pilot program in Shanghai to replace the business tax with a value-added tax to decrease the overall tax burden and boost the transport and service sectors.

The pilot program was expanded to nine provincial regions and three cities, including Beijing, Guangdong and Zhejiang, in August.

The step was not a simple adjustment but a significant systematic innovation that aimed to realize fair taxation on goods and services to promote the improvement of the manufacturing sector and the development of the service sector, Li said.

It is also important for boosting the development of small and medium-sized enterprises, he said. It helped reduce tax burdens for small-scale taxpayers by an average of 40 percent during trials, according to the meeting.

Li said that based on experiences from the current pilot programs, a detailed plan for expanding the trial basis should be formed and an expansion should be carried out in an orderly manner.

The post and telecom, railway transportation and construction sectors will be added to the trial programs at an appropriate time, and the program will gradually be expanded nationally, he added.

Li called for more determination and courage to carry on reforms in important sectors and crucial links and for reforms to the fiscal and taxation, enterprise, financial, pricing and income distribution sectors to provide impetus to the country's development.

Xinhua

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