Chinese Finance Minister Xie Xuren said Thursday that China needs to improve its tax system to stimulate consumer spending, The Wall Street Journal reported. Beijing is studying measures to expand a value-added tax trial and improve China’s consumption tax to “guide reasonable consumption” more effectively, Xie said in a statement on the ministry’s website. An experimental value-added tax reform, already in place in Shanghai, may soon be expanded to Beijing. Under the program, certain parts of the service sector will shift from paying business tax to a value-added tax, thereby lowering their overall tax burden. Xie also said the government is studying a mechanism to curb speculative investment and demand in the property market. China currently sets a special consumption tax on certain categories of goods including automobiles, liquor, cigarettes, luxury items and fuel.
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