China will cut the value-added tax rate on imported goods from April 1. This will reduce the annual import value-added tax burden of import enterprises by about 225 billion yuan (RMB, the same as below) and the tax burden of consumers by 1.35 billion yuan, further stimulating market vitality, the head of the Customs Department of the General Administration of Customs said on the 27th.
On May 1 last year, China revised its value-added tax rates from 17 percent and 11 percent to 16 percent and 10 percent respectively. It is planned that, with effect from April 1, 2019, the original 16 percent VAT rate on imported goods will be adjusted to 13 percent and the original 10 percent rate will be adjusted to 9 percent.
Reducing tax burden and financial pressure of Import Enterprises
The head of the Customs Department of the General Administration of Customs said that based on the static calculation of the value of imported goods in 2018, after the implementation of the VAT reduction policy on April 1, about 225 billion yuan of import value-added tax burden will be reduced for import enterprises in the whole year, effectively reducing the tax burden and financial pressure of import enterprises.
Import value-added tax rate for cross-border e-commerce retail will be cut simultaneously
According to the current import tax policy of cross-border e-commerce retail, consumers who purchase goods through the import channels of cross-border e-commerce retail will pay a tariff rate of 0% within the limit value of individual purchase, import value-added tax and consumption tax in the import link shall be levied at 70% of the statutory tax payable. The tax burden for Chinese consumers will be reduced by 1.35 billion yuan this year after the reduction of the value-added tax rate for cross-border e-commerce retail imports, and this helps to further boost consumption, the official said.
In 2018, China has launched a number of measures to increase imports, including lowering import tariffs, shortening customs clearance time, and holding the first China International Import Expo. Driven by favorable policies, China's import value reached US $2.14 trillion in that year, exceeding US $2 trillion for the first time and hitting a record high.
The Chinese government has made it clear in its work report this year that it will optimize the import structure and actively expand imports. Analysts believe that more pro-import policy measures may come out one after the other.