Degenerate the VAT rate structure from July 1st, why cancel 1?

First of all, the degenerate VAT rate is to further reduce taxes and reduce burdens. At present, international tax competition is becoming increasingly fierce. As we all know, some developed economies in the world have recently implemented or intend to implement a series of tax reforms aimed at promoting their economic development and enhancing their tax competitiveness. Therefore, whether to maintain the steady growth of domestic economy or to cope with the competition of international tax reduction, tax reduction and burden reduction may become the general direction of China's tax policy adjustment in the coming period.

secondly, it is to further improve the tax system. From the practice of international value-added tax development, in order to achieve the goal of value-added tax neutrality, countries are gradually pursuing a more concise value-added tax system. Degenerate tax rates, reduce preferential treatment and broaden the tax base have become the trend and mainstream of value-added tax development. As far as the tax rate setting level is concerned, countries that implement the traditional value-added tax system (represented by the European Union) mainly adopt the second-class tax rate, one of which is the standard tax rate, covering most goods and services, and the other is the preferential tax rate, which is applicable to the people's livelihood field; Countries that implement modern value-added tax system (represented by New Zealand) have only one tax rate.

this "four and three" is the first step of degenerate tax rate. There are two main considerations for canceling the 13% tax rate: First, the scope of application of the 13% tax rate includes grain, tap water, books, agricultural means of production such as chemical fertilizers, pesticides and agricultural machinery, and industrial means of production such as natural gas. The scope is relatively narrow, and there are some duty-free goods, so the reform is moderate and the pressure on fiscal revenue is small. Second, most of these 23 kinds of products are concentrated in the field of people's livelihood, which is closely related to people's lives. The tax rate is lowered, which reduces the cost of purchasing basic daily necessities for residents, reflects the state's tax concern and support for agriculture and people's livelihood, and helps to alleviate the retrogression of value-added tax and better reflect tax fairness.