Business

Editor: Bruce Meng
3 Sep 2008 03:37:45 GMT

BEIJING, Sept 3 - China is considering a 100 billion yuan ($14.6 billion) tax cut as part of a finance reform package, the 21st Century Business Herald reported on Wednesday.

The cut would accompany a shift in the country’s value-added tax (VAT) system from the current production-based levy to a consumption-based system that is the norm in most countries.

Some economists have said the government may lower taxes to deliver a fiscal boost after China’s growth slowed to 10.1 percent in the second quarter from 11.9 percent last year.

The Chinese-language newspaper said the reform may be implemented at the start of 2009. Citing unnamed sources, it said that the Ministry of Finance recently submitted a draft proposal to the State Council.

The VAT reform, which would allow firms to write off core investment expenses from their tax bills, has already been tried on a pilot basis in a handful of provinces.

Finance officials from across the country will meet in September to discuss the proposal, the newspaper said. ($1=6.832 Yuan)