Since 1 January 2012, the State Council has launched the pilot programme for the transformation from Business Tax (BT) to Value Added Tax (VAT) in stages in China (the “B2V Reform”), in order to improve the input VAT credit mechanism, mitigate the multiple taxation issue and promote the economic upgrade. By the end of 2015, the B2V reform has been completed for the transportation, certain modern services, postal services, and telecommunications industries, etc. However, the remaining four industries, namely the construction sector, real estate sector, financial services and consumer services have so far not been included in the B2V Reform partly because of the slowing down of China's economic growth, and partly because of the complicated B2V policy relating to the four remaining industries. On 5 March 2016, at the fourth session of the 12th National People’s Congress (NPC), Premier Li Keqiang announced in the government work report (the “Work Report”) that the B2V Reform will be further rolled out to cover the remaining four industries starting from 1 May 2016. Following that, the Minister of the Ministry of Finance (MOF), Mr. Lou Jiwei shared his views in the Q&A session of a press conference held on 7 March in respect of the implementation date of the final stage of the B2V Reform, reduction of tax burden to taxpayers, and input VAT credit for immovable properties, etc.
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