China, Winning the Third Battle of Comprehensive Rollout of Pilot Program of Transition from Business Tax to VAT with Indomitable Wills and Aspirations

CHINATAX.On June 28, at the critical time of the third battle of ensuring in-depth analysis in the comprehensive rollout of the pilot program of transition from business tax to VAT, the State Administration of Taxation (SAT) held a video conference in Beijing about the transition from business tax to VAT in the national tax system, reviewing and summarizing progress of preliminary transition from business tax to VAT, and arranging the next step for the transition. Wang Jun, Secretary of Party Leadership and Administrator of the SAT, attended the meeting and emphasized that tax authorities at all levels and the broad tax cadres must advance bravely to resolutely win the third battle in the comprehensive rollout of the pilot program of transition from business tax to VAT with indomitable wills and aspirations, and with craftsmanship and a serious, faithful and refined working style.

Wang pointed out that tax authorities at all levels and the broad tax cadres had made strenuous efforts ever since the comprehensive rollout of the pilot program of transition from business tax to VAT in order to ensure smooth invoicing and declaration, and they have got favorable feedbacks from taxpayers. In the third battle of ensuring in-depth analysis, they need to further consolidate the existing achievements, improve scientific and effective mechanisms, with which to strengthen and push forward the reform. They also need to vigorously promote the transition from business tax to VAT spirit and strive for greater victories in the following transition from business tax to VAT program.

Wang Jun emphasized that, tax authorities will bear great pressure in July, as applications from taxpayers for monthly tax declaration, small-scale taxpayers and financial enterprises for quarterly tax declaration and taxpayers for quarterly prepaid corporate income tax declaration will culminate, and at the same time application for VAT invoices will also surge after the transition period of business tax invoices expires. In response to this, the SAT has set up 20 specific measures, including upgrading the state and local tax cooperative norm to the version 3.0 and extending the VAT application period in July to 20th etc. While ensuring smooth invoicing and tax declaration, tax authorities at all levels and the broad tax cadres must make strenuous efforts to analyze operation, tax burden and effect of the transition from business tax to VAT to objectively reflect the results of the reform, probe into problems and take specific measures, thereby better pushing forward the reform and consolidating its foundations.

According to Wang, tax authorities need to further clarify their objectives, problems and responsibilities so as to secure another success in the third battle of the transition from business tax to VAT.
First, tax authorities must clarify their objectives. They should make efforts to ensure in-depth analysis, with objectives of adhering to facilitate good governance of taxation, enterprises and economies. Through ensuring in-depth analysis, efforts should be made to find weaknesses in policies, management and services, thereby facilitating precise improvement. Through ensuring in-depth analysis, tax authorities should actively help enterprises use the VAT mechanism to refine corporate governance to enjoy more reform dividends; through ensuring in-depth analysis, achievements of the transition from business tax to VAT should be reflected via detailed and accurate data, thereby facilitating the transformation and upgrading of economy and economic governance capability.

Second, tax authorities must clarify their problems. They should accept other’s criticisms with grace, instead of evading problems and contradictions. Problems must be analyzed and researched by categories, and specific measures must be set up based on categories and phases of problems. Tax authorities must actively win support and cooperation from various parties to push forward the reform. They should be innovative and enterprising in solving problems and learn from each other to secure better solutions.

Third, tax authorities must clarify their responsibilities. They should strengthen their responsibilities, seriously correct problems caused by insufficient basic management and establish a long-term mechanism. They need to reinforce their responsibilities while pursuing accuracy, and focus on accuracy of initial data collection and dynamic maintenance, thereby ensuring quality analysis. They need to intensify their responsibilities while planning for the future, foreseeing and preventing potential problems and risks so as to ensure rapid and calm responses accordingly. And responsibilities must be intensified in strict disciplines to ensure work achievements.

Major officials from Zhejiang Local Taxation Bureau, Fujian Provincial Office, SAT, Gansu Provincial Office, SAT, Jiangxi Provincial Office, SAT and Qingdao Provincial Office, SAT communicated with each other and made speeches about the progresses of the Transition from business tax to VAT.

SAT officials, including Wang Qinfeng, Wang Kang, Gu Ju, Zhang Min, Sun Ruibiao, Ren Rongfa and Wang Lujin, members from the SAT leading group in charge of transition from business tax to VAT and major officials from various departments, branches and provincial offices of the SAT, attended meetings of the main sessions. Responsible people and related colleagues of the SAT’s branches and local taxation bureaus in various provinces, autonomous regions, municipalities and cities specifically designated in the state plan as well as those at city- and county-level (district) attended meetings of breakout sessions.

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