China exempts vegetables from value-added tax

China's fresh vegetable sellers will be exempted from a 13 per cent value-added tax from 2012, China's Ministry of Finance said on Monday, the latest step by Beijing to relieve cost pressures on smaller firms. Wholesale and retail sellers of sliced, frozen, dried and packaged vegetables from potatoes to cabbages are entitled to the tax break, the ministry said on its website. Sellers of canned vegetables must pay the tax. The latest fine tuning of fiscal policy is unlikely to satisfy independent economists like Andy Xie, who believes tax tweaks announced so far are insufficient with fiscal revenue growing faster than gross domestic output and personal income.

Xie wrote in the latest issue of the Century Weekly magazine that China should cut taxes by 1 trillion yuan - or about 10 per cent of total annual tax revenue - if Beijing wanted to deliver a real economic boost. He advocates a 20 per cent across-the-board cut to value-added tax, consumption tax and business tax on top of additional cuts in personal income tax. China's latest tax cut cites a long list of produce, including tomatoes and corn, in the exemption.

Source: economictimes.indiatimes.com