In an effort to ease food inflation China has removed a value-added tax on vegetable distribution retroactively to 1 January.
According to a report by the Wall Street Journal, The Ministry of Finance and State Administration of Taxation announced the tax waiver on Monday. This was in keeping with a draft law opened for public comment on 20 December 2011.
The 17 per cent VAT applied to companies involved in importing and exporting, production, distribution and some retail, the newspaper reported.
'The lower costs benefit distribution companies, especially vegetable wholesalers,' Gao Wang, an analyst at Beijing Orient Agribusiness Consultant, told the newspaper.
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