Shanghai will expand reform of the value-added tax system to embrace all sectors this year as part of efforts to remove barriers to broader economic restructuring, the municipal taxation regulator said yesterday.
The VAT will replace business tax this year in the remaining four industries — finance, construction, property and consumer services — to help trim the tax burden on corporations, the regulator told a meeting.
"VAT reform in these sectors, especially the financial industry, will have a significant impact on Shanghai," said Tu Guangshao, executive vice mayor of Shanghai. "It's an opportunity for the city to further drive the growth of the service sector."
In 2012 Shanghai started a pilot reform to replace the business tax with a more transparent and fairer VAT system. The plan called for all industries to complete the shift nationwide by the end of last year.
Since 2012, the reform has helped enterprises in Shanghai to save 38.1 billion yuan ($5.9 billion) in tax savings, official data showed.
Shanghai is also eying tax policies to lift business activities via its free trade zone.
