Zhu Qing, a professor at Renmin University of China who specializes in tax studies, believes the move from corporate tax to VAT will have a profound effect, which many people have yet to realize.
"What's crucial about VAT is that it establishes a uniform tax to replace the previous two separate taxes. This is more important than the amount of money businesses have saved through tax reform," he said.
Zhu believes the implementation of a uniform rate of VAT is achievable as a result of China's adoption and development of internet technology and big data.
"The sound development of internet governance, online registration and big data makes it easier to track businesses that try to avoid paying taxes, thus improving the prospects for a uniform rate of tax," he said.
For Bai Chong'en, a professor at Tsinghua University's School of Economics and Management, the reduction of fees levied on companies is an essential move to promote business vitality. He said companies that try to avoid paying fees rarely save money in the long run.
"Cutting fees is just as important as cutting taxes. But because there is a lot of flexibility with fees, some companies may work on finding loopholes to help them avoid paying. Yet by doing so they are also paying the cost of taking a risk," he said.
"Government moves to reduce business-related fees are crucial, because they will discourage companies from trying to avoid fees, and that will gradually build a business environment that more people will believe in."
