To make sure the VAT pilot program is rolled out nationwide on time on Aug. 1, the State Administration of Taxation (SAT) convened a conference call on the program across the taxation system on the morning of July 24, with ideas and experiences exchanged and current and future work arranged for. Xie Xuezhi, deputy administrator at the SAT, addressed the meeting.

In his speech, Xie said the VAT pilot program currently runs smoothly in 9 provinces and municipalities including Shanghai and Beijing. As at the end of May, 1.29 million households in these provinces (municipalities) had been included in the program. Taxpayers included in the program paid VAT of RMB 44.8 billion in total between Jan. and May. Estimates show that, compared with the business tax, 9 provinces and municipalities cut taxes of RMB 17.6 billion, representing a decrease of 28% and involving more than 95% of taxable items deducted. Since the kickoff of the VAT pilot program, taxpayers subject to the program have conducted accounting, filed returns, and made payments of taxes in an orderly manner, and tax bureaus have put measures regarding tax services, tax collection and risk control in place. Taxpayers and tax bureaus have adapted themselves to the requirements of the new tax system, with the 9 provinces and municipalities subject to the VAT pilot program having transitioned from the tax system replacement period to the daily collection and management period.

Regarding the preparatory work for the nationwide expansion of the VAT pilot program, Xie said, the SAT will draw on the experience from the VAT pilot program that is currently operational in selected regions and create 66 assignments in ten aspects for the nationwide rollout and implement them one by one. It will also organize regions that have been included in the program to provide assistance to the regions to be included in the program following the nationwide rollout. In the light of the SAT's overall arrangements, tax bureaus at all levels should develop concrete schemes and divide assignments in detail to be better prepared for the rollout. 1.0426 million taxpayers are now subject to the pilot program, including 477,100 from the transport sector and 565,500 from the modern services sector. Overall, basic preparations such as data investigation and estimates, tax source transfer verification, transfer of tax collection materials, installation of hardware facilities, upgrade of software system, invoice sales and supply, and training of business staff are now well underway. In the run up to the nationwide rollout, local and state tax bureaus have cooperated with each other closely, with the former taking a holistic view and the latter playing a leading role, thereby successfully completing the handover.

Xie also made arrangements for the nationwide rollout. He stressed, the nationwide expansion is only seven days away, and we are facing a strenuous task. Today's conference call is intended to exchange experiences and arrange for future work as well as mobilizing parties concerned. Xie requested tax bureaus to endeavor in the following four aspects:

First, implement the VAT pilot program well as an important move to promote the Mass Line campaign. Streamline all the preparations again before Aug. 1, with focus on adding the missed to make sure policies and institutions, basic information, technology guarantee, business staff and emergency response plans are all in place. Efforts should be made to ensure taxpayers can issue invoices and file tax returns smoothly, and tax bureaus run stably and manage tax collections as usual after the rollout. During the implementation of the program, focus should be put on the operation of pilot sectors, with problems identified, analyzed and solved immediately, effect analysis made and reform results assessed. In addition, during the Mass Line campaign, a liaison system for the leadership should be created, with guidance offered in the first place and problems solved to ensure the smooth operation of the reform.

Second, fully understand the arduousness of the VAT pilot program. It should be clearly realized that expansion of the rollout program to include "one plus seven" industries on Aug. 1 is not the end of the program but a new starting point to advance the reform. Efforts should be made to ensure the smooth operation of the pilot sectors and prepare for the future inclusion of the railway transport and posts and telecommunications industries after Aug. 1. Facing a strenuous long-term task, tax bureaus across the country must be fully prepared and bold to forge ahead.

Third, policy promotion and media guidance should become more rigorous. As a key part of the fiscal tax reform, the VAT pilot program has drawn wide concerns from taxpayers and the public. Tax bureaus at all levels must follow the principle of increasing taxpayer satisfaction and compliance based on taxpayer needs to more rigorously promote the reform and policy adjustment, increasing the relevance, promptness and efficiency of the promotions, especially with more initiatives taken. On the one hand, channels must be kept smooth for taxpayers to offer comments and suggestions and explanations should be made in the interactions between tax collection and payments to help taxpayers solve their difficulties and ensure the smooth operation of the reform. On the other hand, watch out for the information released on the internet and changes in the media and use channels such as media, tax service halls and 12366 hotline for taxpayers to expound the meaning of the reform and respond to the issues that are widely concerned, to raise awareness of the importance of reform among the public and build a favorable media environment for the advancement of the reform.

Fourth, measures must be taken to strictly prevent and control risks of tax evasion and dodging like false invoices. Since the kickoff of the program, cases such as issuing false invoices have increased. To prevent this, regions must enhance tax assessment, strengthen tax source monitoring and carry out investigations more rigorously to prevent risks associated with the program. Cautions must be taken against tax evasion and dodging such as issuing false special VAT invoices, false increase or withholding of input taxes, and concealing sales revenue, and cooperation should be deepened with the public security department, with joint mechanism established to prevent and crack down on tax-related crimes, thus creating a favorable environment for the smooth operation of the pilot reform.

Shanghai State Tax Bureau, Jiangsu State Tax Bureau, Shandong State Tax Bureau and Inner Mongolia Autonomous Region State Tax Bureau briefed information on the VAT pilot program. The SAT Goods and Labor Tax Department, Electronic Tax Management Center and General Office made arrangements for the current and future work priorities of the VAT pilot program.

Fan Jian, chief auditor of the SAT, presided over the meeting. Heads of the bodies under the SAT attended the meeting at the main venue. Leadership from state and local tax bureaus across the country and heads from related departments for the VAT pilot program were present at sub-venues.

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