The Ministry of Finance and the State Tax Administration jointly released the “Announcement on Policy for Simplifying and Unifying VAT Rate” on June 13, 2014. From July 1, 2014, a uniform VAT Levy rate of 3% will be implemented for enterprises engaged in industries such as construction materials and small hydro power and enterprises engaged in pawn broking or consignment.
According to the announcement, Duty free goods sold at authorized stores will be subject to VAT at 3% rate instead of 4%. The tax reduction will benefit related industries and assist stabilize economic growth, Economic specialists said.
After a meeting in last week, the State Council said that the country’s tax reduction in certain areas as running water supply and small scale hydropower generation will save companies USD 3.9 billion per year.
