Value Added Tax and its Implementation in China
Excerpt:
VAT is a central part of China’s tax policy as it accounts for 60% of its total annual tax revenue and has been part of the Chinese system for over 30 years now. This paper will more closely examine the mechanics of VAT in general as well as to specifically look at how it is implemented in China. There are some very distinct benefits to using VAT, particularly logistically, as around 135 countries use it. However there are some concerns as well regarding VAT, specifically concerning the fairness and regressive nature of the tax. VAT has proved extremely important to working China whether in the business or in the political world. Thus it is increasingly important, before making any sort of investment in the country, to have a good understanding of it works and how it might apply to you.
