What is VAT? How do you see a reduction in VAT?

VAT refers to a tax levied by the state on the cost incurred by the value added to goods. A reduction in VAT has a double impact on the state, businesses and individuals.

First, there will be a more negative impact on the state. VAT is a tax on state revenue, which is used for national construction and so on, and a reduction in VAT represents a reduction in the state's tax burden, which reduces the amount of money available for working capital.

Secondly, it will have a positive impact on the enterprises. Reducing the VAT will reduce the burden of the enterprises and increase their income, which is favorable for the enterprises to expand the scale of investment and reproduction, which will lead to the development of China's economy. In addition, the expansion of the scale of enterprises will increase the demand for employees and provide a large number of employment opportunities.

Thirdly, VAT will be lowered, employment opportunities will increase, people's income will increase, living standards will improve, the sense of well-being will rise, and love and belonging to the country will increase, which is conducive to stabilizing people's hearts and solving the basic problems.

Expanded:

Article 15 of the Provisional Regulations of the People's Republic of China on Value-Added Tax (VAT) exempts the following seven items from VAT:

1. Agricultural producers' sales of self-produced agricultural products;

2. Contraceptive medicines and paraphernalia;

3. Antiquarian books;

4. Directly Imported instruments and equipment used for scientific research, scientific experiments and teaching;

5. Imported materials and equipments freely assisted by foreign governments and international organizations;

6. Goods directly imported by organizations for the exclusive use of the handicapped;

7. Goods for sale that have been used by the seller himself/herself.

Except for the provisions of the preceding paragraph, the tax exemptions and reductions of value-added tax shall be prescribed by the State Council. No region or department may prescribe tax exemptions or reductions.

Baidu Encyclopedia-Value Added Tax