What are the trends in taxation in China in the coming 5-10 years?
Since 1994 there have been great changes, which have played a large role in boosting the country's economy, however many areas still need reform. Some areas are the following: 1. Value-added tax reform: the anticipated changes are to expand the VAT scope to cover aspects that were originally subject to business tax. 2. Changes in tax rates in order to comply with the WTO requirement that foreign and domestic enterprises shall be treated equally. The anticipated changes regard tax incentives and statutory enterprises income tax rates. For individual taxes, the goal is to adjust the taxable income classes in order to lighten the burden for persons with lower income. 3. Changing the tax incentives currently available. It is anticipated that incentives will be retained but that the gap between the regimes that are for foreign and domestic enterprises will be eliminated. 4. Generally speaking stricter compliance and enforcement by the authorities is expected.