Yesterday, China announced one of the most important tax reforms of the past twenty years. It is replacing a business tax on gross revenue for non-manufacturing companies with a VAT. Manufacturing companies have been subject to a VAT approach for a few years. The reform extends it from manufacturing and a few services in a pilot program to industry-wide application. It will now cover construction, real estate, finance and consumer services. The shift to the VAT is expected to reduce the service sector's tax bill by CNY500 bln (~$77 bln) or 0.7% of GDP. A report indicated that businesses will pay 11% VAT compared with ... (full story)