Chinese MF Reveals Tax Policies for 2012

February 22, 2012 Taxation in China

China Reveals Tax Policies for 2012BEIJING – China’s budget deficit and debt levels are currently within a safe margin, allowing the government to implement new fiscal policies in 2012 in order to maintain the economic growth of the country.

In an interview conducted earlier this week, the Minister of Finance Xie Xuren described the intentions of the government of China to implement new proactive policies throughout 2012 to improve the national tax system, to increase the incomes and improve the livelihoods of taxpayers of China, and to expand the country’s investment infrastructure.

One of the primary goals of the Chinese government over 2012 is to improve the efficiency and structure of the national tax system in order to provide better economic conditions for small and medium sized enterprises in China, and as an initial step, the government plans to raise the value added tax payment threshold for businesses.

According to the Minister, in 2012 the government will revise the implementation of value added taxes on the transport and service industry Shanghai, in a trial aimed to expand and modernize these sectors while, at the same time, raising tax revenues. If the pilot program proves successful, similar initiatives may be started in other large cities around the country.

The government will also continue to operate and expand the property tax system that was implemented across selected urban areas in China over 2011.

Tax incentives will also be offered to enterprises in China to encourage them to upgrade and restructure their industrial facilities.

In an effort to raise the incomes of low paid workers around China, the government plans to implement tax changes aimed towards low income earners and also expand the current social pension system to cover a greater number of citizens.

In order to improve the living conditions of taxpayers the government will also work to further stabilize the prices of essential commodities and foods.

In his interview the Minister added that the government of China plans to maintain a steady level of investment in infrastructure development, especially for housing projects, water conservation and treatment facilities, and for the development green technologies.

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