Beijing set for tax reform test

Beijing will soon start a pilot program to replace turnover tax with value-added tax to accelerate structural adjustments in the economy, a statement from the local tax office said. It will be the second trial zone after Shanghai.

The pilot plan was approved by the State Council and it may start from July 1, according to analysts.

Taxpayers in Beijing need to fill in new declaration forms provided by the Beijing Municipal Office of the State Administration of Taxation from this week, preparing for the launch of the trial, said the statement.

The government started the reform of replacing its turnover tax with VAT in the transport sector and some service sectors in Shanghai this year in order to avoid double taxation.

The pilot plan in Beijing is quite similar to that in Shanghai in also focusing on the transport and service industries. A tax rate of 11 percent may be approved for the transport business while most modern service companies are likely to pay 6 percent tax.

The government has vowed to accelerate the expansion of tax reform. So far, 10 provinces and cities have applied to do so, including Tianjin, Chongqing, Jiangsu and Fujian.

chenjia1@chinadaily.com.cn