(Yicai Global) July 17 -- Reductions in value-added taxes in China have helped to save consumers some CNY34.8 billion (USD5.2 billion) in their first month of implementation, the tax administration says.
The VAT reforms affect close to 9 million tax payers and savings are equivalent to a little over 8.5 percent of their total taxes paid out, said Wang Daoshu, head of the tax administration's goods and services tax department.
China cut VAT rates effective May 1 to 16 percent from 17 percent for manufacturing and to 10 percent from 11 percent for transportation.
Manufacturing, transportation and construction industries have all reported reductions in taxes since the reform, with manufacturing posting the biggest drop, Wang said. In the first month of implementation, some 2.5 million general VAT taxpayers in the sector saved some CNY14.1 billion, paying out 8.8 percent less than before. Tax reduction in manufacturing accounted for 40.7 percent of the total cuts across all industries.
Tax authorities brought in some CNY8.16 trillion in tax revenue in the first half of the year, up 15.3 percent annually. Export tax rebates totaled CNY780 billion in the first half, an increase of 7.3 percent. Corporate income tax, which is related to corporate profitability, rose 13.5 percent.
Editor: William Clegg