VAT to be reduced on agricultural products in July

Value-added tax on agricultural products and some other goods will be reduced starting in July, the Ministry of Finance said on Wednesday.

The value-added tax rate faced by companies to import or sell agricultural products will be reduced from 13 percent to 11 percent, according to an online announcement by the ministry.

Companies that import or sell forage products, vegetable oil, natural gas and books will also receive the same level of tax cut benefits, the ministry said.

After the measures are implemented in July, the value-added tax regime will be simplified by combining four tax rates into three, with the 13 percent tax rate being elminated and keeping the 17, 11 and 6 percent tax rates.

Zhang Bin, a senior researcher with the Chinese Academy of Social Sciences, said measures targeting specific key sectors, such as agriculture, will help lower the costs of enterprises amid economic downward pressure.

China launched value-added tax reform in 2012, and it was extended to the construction, real estate, finance and consumer services sectors in May last year.