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VAT on vegetables is removed to curb inflation
China
Tuesday 10 January 2012
MD
VAT on vegetables has been removed for wholesalers and should lead to lower prices for Chinese consumers.
Since early 2011, the price of vegetables increased by 26%, so in an attempt to reverse this trend, China is to remove VAT on vegetables.
VAT on the distribution of vegetable has been removed, the Chinese Ministry of Finance announced this measure retroactive to January 1. This decision should reduce costs for wholesalers and lead to lower prices to consumers.
VAT of 17%
was applied to companies engaged in import and export, production, distribution or retail operations. The exemption applies to vegetables, processed but not canned.
Food price inflation is a major concern of Chinese authorities. The price of vegetables increased by about 30% over the last 8 weeks of last year, and 26% since the beginning of 2011.
source : wall street journal com
