China 2016 VAT reform will let industries save US$85b on taxes: stats bureau

[BEIJING] China's plan to expand its value-added tax (VAT) reforms will let industries that enter the scheme this year pay 560 billion yuan (US$85.1 billion) less in tax than they did in 2015, the National Bureau of Statistics said on Tuesday.

Wang Baoan, chief of the bureau, also said China may raise its ratio of its fiscal deficit relative to gross domestic product to cover the lower tax revenue, but he said such a move would not be aimed at stimulating growth.

On Monday, Premier Li Keqiang said China would expand tax reforms to replace a business tax with a value-added tax (VAT) this year.

Wang also said the government would avoid harsh steps in reducing industrial overcapacity, leverage and inventories.

REUTERS