China should expand scope of offsetting betweenn turnover tax, VAT
Wednesday, 30 July 2008
BEIJING, July 29 (Xinhua): China should expand the scope of mutual offsetting between turnover tax and value-added tax (VAT) for the purpose of promoting technological advancement and industrial innovation, according to Xu Shanda, former deputy director of China's state administration of taxation.
Xu also pointed that turnover tax reform should be deepened and expanded to the level of VAT reform, since the former currently has quite a few disadvantages.
"Currently, it is still not the right timing for full replacement of turnover tax by VAT. So it is better to expand the scope of mutual offsetting between the two types of tax," said Xu.
In response to worry that VAT reform may lead to investment overheating, Xu noted that such reform only encourages technological upgrading investment and the successful experiment in northeast China has proved its significance in enhancing the technological innovation capacity of high-tech companies.
Xu also pointed that turnover tax reform should be deepened and expanded to the level of VAT reform, since the former currently has quite a few disadvantages.
"Currently, it is still not the right timing for full replacement of turnover tax by VAT. So it is better to expand the scope of mutual offsetting between the two types of tax," said Xu.
In response to worry that VAT reform may lead to investment overheating, Xu noted that such reform only encourages technological upgrading investment and the successful experiment in northeast China has proved its significance in enhancing the technological innovation capacity of high-tech companies.