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City spurs growth with tax reform
By Economic Daily |
June 20, 2012, Wednesday
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Print Edition
Print Edition
SHANGHAI is a good example of how tax restructuring could spur stable economic growth.
In one case, Shanghai has replaced business tax with value-added tax for a select number of enterprises in a tax reform trial. As a result, these firms reported a reduction of more than 2 billion yuan (US$314 million) in their tax burden in the first quarter of this year.
In another case, Shanghai plans to impose a lower tax burden on those who buy an apartment in the suburbs than on those who buy in downtown. To be specific, Shanghai plans to impose a 0.6 percent real estate tax rate on downtown purchases, and a 0.4 percent tax rate on suburban deals. That effectively diverts people from living in the overcrowded city center.
In one case, Shanghai has replaced business tax with value-added tax for a select number of enterprises in a tax reform trial. As a result, these firms reported a reduction of more than 2 billion yuan (US$314 million) in their tax burden in the first quarter of this year.
In another case, Shanghai plans to impose a lower tax burden on those who buy an apartment in the suburbs than on those who buy in downtown. To be specific, Shanghai plans to impose a 0.6 percent real estate tax rate on downtown purchases, and a 0.4 percent tax rate on suburban deals. That effectively diverts people from living in the overcrowded city center.
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