Business, Management and Accounting
2 years ago

China's VAT Rate Reform Cuts Corporate Tax Burden by 9.1%

2 views
The Singapore Economic Review
Value-Added Tax and Corporate Tax Burden: Evidence from China’s Value-Added Tax Rate Reform
Xiufen Liu, Hongsheng Fang

Paper Summary

China reduced the value-added tax (VAT) rate in 2017 to help businesses and boost the economy. The VAT rate reform lowered the total tax burden on companies by 9.1%, mainly due to less VAT. Income tax burden didn't change much. The VAT reduction had a bigger impact on companies with fewer input costs, less market power, in eastern China, and with more fixed assets.

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