In September, the national tax authorities embraced the first period of tax collection after the dual expansion of pilot for the transformation of business tax into value-added tax (VAT). As in the afternoon of September 2, taxpayers in 24 pilot areas across the country had declared 17,354 households to relevant authorities and collected taxes of RMB 298.62 million, with smooth operation of tax declaration. Presently the tax authorities in all regions are paying close attention to tax declaration during the period of tax collection and intensifying dynamic monitoring to provide taxpayers with high-quality tax services and ensure the smooth implementation of tax declaration.

Two stages are critical for the implementation of the pilot program, that is, taxpayers are allowed to issue special VAT invoice as of August 1 and are allowed to make tax declaration as of September 1. The implementation of the new system that allows taxpayers to claim invoices, issue invoices and declare taxes marks the full implementation of dual expansion of business tax transformation into VAT and the preliminary completion of the transition of tax systems.

To ensure smooth implementation of the pilot program during the first stage of tax declaration, tax authorities across the country made earnest efforts to provide on-site tutorship to taxpayers on tax-related business such as tax declaration, financial accounting, invoice issuance, tax calculation and payment. Shandong Provincial Office of SAT, compiled various kinds of brochures and training materials which were issued to taxpayers free of charge. As at the end of August, the province had conducted centralized training for 116,485 taxpayers, of whom 6249 from key industries were trained and 10,217 were trained in a one-to-one manner. Meanwhile the tax authorities have managed to provide sound environment for taxpayers by devoting strenuous efforts to software and hardware testing and the optimization of window setup of tax service halls. As at 3pm, September 2, 1121 households incorporated into the pilot program in Shandong had completed tax declaration, with total sales of RMB 372.83 million declared and VAT of RMB11.14 million involved. Inner Mongolia Autonomous Region Office of SAT monitors tax declaration progress in a real-time manner and urges taxpayers to timely declare tax so that all taxpayers can issue invoices, square their accounts and pay taxes. As at 10am, September 1, 28 taxpayers incorporated into the pilot program had declared VAT of RMB1.079 million. Sichuan Provincial Office of SAT provides taxpayers incorporated into the pilot program with a broad range of channels for tax declaration such as window declaration, online declaration and self-service declaration. It also increased staff to respond to inquiries of taxpayers and provide consultation and guidance to them, and formulated contingency plan for tax services to minimize the risks of blocking-up and system faults which could affect tax declaration. As of September 4, 1733 general taxpayers had completed declaration procedures, with VAT of RMB117443.3 thousand collected, and 2789 small-scale taxpayers had completed declaration procedures, with VAT of RMB 5607.3 thousand collected.

Tax collection was smoothly implemented during the first period of the dual expansion of the pilot program. Guangdong Provincial Office of SAT strengthened communication with the finance bureau and local tax bureaus to work out and issue the pilot implementation plan, according to which on the pilot program was carried out in 4 phases, i.e., confirmation of tax accounts, training and tutorship, tax-related matters handling and implementation, formulated internal instructions on operation, and provided guidance to taxpayers to complete various tasks from tax registration to declaration. On September 2, Yingdao Film Distribution Corporation completed the first tax declaration in the broadcasting and film industry, tax being deducted successfully. Zhejiang Provincial Office of SAT will further intensify the communication with associations of statistics, transportation and other related sectors, pay attention to the changes of economic structure of the province, changes of tax burden on pilot taxpayers and changes of internal management of enterprises after the implementation of the pilot program, so as to provide practical experience for wider implementation of the pilot program. The tax authorities will continue to provide services for taxpayers to issue invoice, and tighten up management of tax service halls and expanded service outlets. Hebei Provincial Office of SAT will dispatch six teams to different localities of the province to gain insights on the effectiveness of training programs related to the pilot program and the pressures of tax service halls during the period of tax collection, endeavor to solve possible problems arising from the declaration through coordination, so as to ensure the smooth implementation of tasks during the first stage of tax collection. Shaanxi Provincial Office of SAT attached special importance to the changes of tax burden on various sectors incorporated into the pilot program, strengthened the analysis of policy effects, and promoted the transformation and upgrading of local economy. Changsha Municipal Office of SAT clearly defined the specific tasks of tax declaration during the first month of pilot implementation and the responsibilities of various departments, made plans for dealing with emergencies during the implementation, created a green channel to facilitate the implementation, and assisted taxpayers in overcoming difficulties in a timely manner.

To ensure smooth implementation of the first tax collection period after the expansion of the pilot program and carry out the reform on a larger scale, the SAT required tax authorities to fulfill the following tasks:

I. Strengthen dynamic monitoring. Tax authorities should intensify efforts for making arrangements for tax declaration during the pilot implementation, gain insights on the progress of declaration in a timely manner, pay special attention to tax declaration, invoicing and tax payment by taxpayers, identify, analyze and solve problems arising from the implementation punctually, and fulfill administration responsibilities in an earnest manner. Major leaders of tax authorities should play an exemplary role in tackling difficulties so as to ensure the smooth implementation of the reform.

II. Perform duties for policy dissemination and guidance. Tax authorities should timely respond to public comments and key concerns of taxpayers, sort out the priorities of taxpayers, and improve specific publicity and service measures. Tax authorities should enhance dissemination and guidance of policies aiming at addressing key issues such as the selling and issuing of invoices on an agency basis, filing tax returns and the crowding of tax service hall. Priority should be given to the supportive role of tax service halls in disseminating policies and responding to inquiries, so as to create a transparent environment and easy access for taxpaying activities.

III. Ward off risks of tax fraud and evasion. Tax authorities should pay close attention to tax collection risk during the pilot implementation, enhance taxpaying evaluation, strengthen the monitoring of tax sources, crack down severely on the false issuance of special VAT invoice and tax evasion and fraud such as falsely exaggerating the input VAT for deduction and concealing of sales incomes, team up more closely with the police to avoid and combat tax-related illegal and criminal activities through the establishment of an linkage mechanism, so as to create a sound tax environment for the smooth implementation of the reform.

IV. Continue to carry out the reform. The successful completion of the first tax declaration period in September marked a new start for the wider implementation of the pilot reform. Tax authorities should perform their duties to ensure the smooth implementation of the pilot program in the existing pilot industries, enhance the analysis into the effects of the reform, gauge the impact of the reform on the economic restructuring of the pilot areas by use of tax income data, and propose suggestions on the deepening of the reform.

Besides, tax authorities in all regions are also required to remind taxpayers of the duration of tax declaration, that is, taxpayers should complete declaration of the first month during a period from September 1 to 15. Considering that the 15th of September coincides with the weekend, the declaration will be postponed to September 16. The tax service halls and the 12366 tax service hotline are required to answer inquiries of taxpayers on possible difficulties during tax declaration in a timely manner.

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