More Chinese cities will join a trial tax reform by replacing business tax with a lower value-added tax (VAT) , the Shanghai Securities News reported on Tuesday, citing unnamed sources.
 
Five cities — Beijing, Tianjin, Chongqing, Xiamen and Shenzhen — and five provinces — Jiangsu, Hunan, Hainan, Anhui and Fujian — will implement the tax reform, the report said.
 
The plan for the expansion will be announced at the end of May or in June, and the trial should be rolled out by the second half of the year, the paper said.
 
Chinese Premier Wen Jiabao said on Sunday that the government will speed up the expansion of the tax reform pilot begun in Shanghai, amid other remarks on maintaining growth.
 
Under the program, certain industries in Shanghai had their business tax replaced with a lower VAT starting this year, as part of the country’s broader tax reforms and efforts to selectively boost certain sectors without loosening overall macroeconomic policy too much.
 
In the next step of the tax reform, China’s state taxation administration prefers trials in selected industries to new rounds of trial expansion, the paper said.
 
Reform would be first implemented in mature industries, applicable nationwide, and then rolled out to other industries, the paper said.
 
Transportation would be included in the first stage, the paper said.
 
  
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