Expect More VAT Rebates with the new Economic Stimulus from China

The Chinese Government just announced on Sunday (November 9, 2008) that a massive economic stimulus package will be introduced to help China and the domestic market continue to keep healthy during the global economic crisis. One of the larger measures will be additional VAT (Value Added Tax) measures to boost trade. Below is a specific excerpt from the official government press that can be found here.

A stimulus package estimated at 4 trillion yuan (about 570 billion U.S. dollars) will be spent over the next two years to finance programs in 10 major areas, such as low-income housing, rural infrastructure, water, electricity, transportation, the environment, technological innovation and rebuilding from several disasters, most notably the May 12 earthquake.

The policies include a comprehensive reform in value-added taxes, which would cut industry costs by 120 billion yuan.

As we at SourceJuice find out the details of the VAT (Value Added Tax) changes, we will report on the changes as well as identify the new data that will outline the specific changes and benefits. Once again, to understand what a VAT is and how it can better help you negotiate if not cut costs significantly when you have such knowledge and know how the system works please read our prior post on SourceJuice.com. Go here for that article.

-The Sourcejuice Team