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Revised VAT to rejuvenate textile industry
12 Nov '08
1 min read
Government of China recently announced adjustment in value-added tax (VAT) for textile industry that will be put into effect from next year.
The VAT rate will be pulled down to 3 percent for all small businesses from the original 6 percent for industrial firms and 4 percent for commercial companies.
This move was made taking into consideration the tough scenario in the global market.
Experts are predicting that this new VAT will be extremely beneficial for the industry on the whole, especially since, this time, it is not production-based regime but a consumption-based one.
State council explained that this will provide some relief to the companies' tax burdens on fixed assets expenditure, and will cut the country's overall tax yoke by over 120 billion yuan next year.
Experts calculate that the sector will enjoy tax reduction of as much as 16.1 billion yuan in total, assuming that textile industry fixed asset investments in 2009 would reach 280 billion yuan, of which 45 percent will be subject to tax deductions.
The VAT rate will be pulled down to 3 percent for all small businesses from the original 6 percent for industrial firms and 4 percent for commercial companies.
This move was made taking into consideration the tough scenario in the global market.
Experts are predicting that this new VAT will be extremely beneficial for the industry on the whole, especially since, this time, it is not production-based regime but a consumption-based one.
State council explained that this will provide some relief to the companies' tax burdens on fixed assets expenditure, and will cut the country's overall tax yoke by over 120 billion yuan next year.
Experts calculate that the sector will enjoy tax reduction of as much as 16.1 billion yuan in total, assuming that textile industry fixed asset investments in 2009 would reach 280 billion yuan, of which 45 percent will be subject to tax deductions.
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