MOF launches surveys on tax reform pilots

China's Ministry of Finance (MOF) has launched surveys on reform pilots for replacing business tax with a value-added duty, the MOF said Monday.

The ministry has set up 12 local monitoring offices in provinces and municipalities to follow the practice of the pilot scheme as well as the scheme's effects on local economies and enterprises.

From early April to the end of 2013, the surveys will monitor at least 10 enterprises in each of the pilot industries, the ministry said.

On April 10, the State Council, China's cabinet, decided to expand its value-added tax (VAT) reform to the entire country from Aug. 1. It hopes to complete the reform by the end of 2015.

China introduced the reform in Shanghai last year to avoid double taxation. It was later expanded to another 11 regions, including the municipalities of Beijing and Tianjin, and Shenzhen in south China's Guangdong Province.

By Feb. 1, the program had saved over 1 million taxpayers more than 40 billion yuan (6.47 billion U.S. dollars) in taxes, according to MOF data.

Business tax refers to a levy on the gross revenue of a business, while VAT refers to a tax levied on the difference between a commodity's price before taxes and its cost of production.

Business tax must be paid by nine industries in China -- transport, construction, financial and insurance, postal and telecommunications, cultural and sports, entertainment, service, intangible asset transfer and real estate sales.

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