What impact does the transformation of VAT have on China's economy?

In an interview with reporters, the responsible persons of the Ministry of Finance and State Taxation Administration of The People's Republic of China pointed out that the core content of this reform is to allow enterprises to deduct the value-added tax contained in purchased equipment, which will eliminate the repeated taxation factors caused by the current production-oriented value-added tax system in China and reduce the tax burden of enterprise equipment investment. Under the premise of maintaining the current tax rate, it is a major tax reduction policy.

Zhang Bin, an associate researcher at the Institute of Finance and Trade Economics of China Academy of Social Sciences, said that on the other hand, this reform also means that China enterprises and domestic and foreign-funded enterprises will enjoy the same treatment in terms of VAT relief in the future.

An Tifu, a professor at Renmin University of China, believes that reducing the rate of value-added tax levied by small-scale taxpayers will help alleviate the current situation of excessive burden on small and medium-sized enterprises, which is of positive significance for supporting the development of small and medium-sized enterprises and promoting employment.

In this regard, the Ministry of Finance of China and State Taxation Administration of The People's Republic of China also indicated that they would further encourage the development of small and medium-sized enterprises by raising the threshold of value-added tax and business tax.

Xie Baijun, chairman of Zhejiang Shengzhou Xinzhonggang Thermal Power Co., Ltd., said in an interview that the full implementation of the value-added tax reform has a great impact on enterprises and will greatly reduce the cost of technological transformation of enterprises. For example, he said that his company now invests about 20 million to 30 million yuan in small-scale projects every year, and after the reform, it can reduce taxes by 2 million to 3 million yuan, while large-scale projects that invest more than 654.38 billion yuan can reduce taxes by about 654.38 billion yuan, which is not a small sum for enterprises and provides the possibility for enterprises to expand investment.

Konka, director of the Institute of Fiscal Science of the Ministry of Finance, said in an interview that under the newly determined proactive fiscal policy, the transformation of value-added tax, as a reform to reduce the burden on enterprises, is conducive to encouraging enterprises to update their equipment and technology and promoting enterprises to become long-term investors in the market.

The relevant person in charge of the Ministry of Finance said that at present, the global economic growth has slowed down obviously, and some countries even show signs of economic recession. The financial crisis is having a major adverse impact on the real economy. In this situation, the timely introduction of VAT reform plays a very important role in strengthening the development potential of enterprises, improving the competitiveness and risk resistance of Chinese enterprises, and overcoming the adverse impact of the international financial crisis on China's economy.