The National People’s Congress Standing Committee’s legislative work plan for this year has unveiled significant signals regarding tax reform in China. The latest tax reform signals were revealed in the 2024 legislative work plan of the Standing Committee of the National People’s Congress.
One of the key highlights is the completion of the tariff law review and legislation, which was recently passed. The focus is now shifting towards the review of the Value-Added Tax (VAT) law, scheduled for December.
Shi Zhengwen, director of the Fiscal and Taxation Law Research Center of China University of Political Science and Law, emphasized the importance of VAT reform, considering it as China’s largest tax. The upcoming review of the VAT law signals potential major reforms, especially in light of the new round of fiscal and tax reforms proposed by the central government.
The VAT reform is expected to simplify the current three VAT tax brackets into two, aiming to enhance neutrality and reduce tax collection and management costs for enterprises. The reform is also likely to adjust standards, thresholds, and collection rates for small-scale VAT taxpayers.
Furthermore, the Consumption Tax Law has also been included in the legislative plan, signaling upcoming reforms in the consumption tax system. The reform is expected to adjust the scope of taxation, redistributing revenue between the central and local governments, and streamline the taxation process.
However, individual tax reform and real estate tax legislation are unlikely to progress this year, as they have not been included in the legislative plan. The focus remains on VAT and consumption tax reforms, with future reviews contingent on the progress of these reforms.
Overall, the tax reform signals unveiled in the legislative work plan indicate significant changes on the horizon for China’s tax system. Stay tuned for further developments as the reforms progress through the legislative process.
(Source: China Business News)