ABSTRACT
A tax reform measure that had been advocated for over ten years was finally brought into fruition by the global financial crisis (GFC). Value added tax (VAT) reform constituted the most important tax policy action China took during 2008-9. During 2007, before the GFC could have been widely anticipated, China adopted several important tax reduction measures, foremost among which was the passage of the Enterprise Income Tax Law. Tax policies specifically responding to the global economic recession did not appear until summer 2008. In August, China began a series of increases in the rates at which VAT borne by various categories of exported products is refunded to exporters. Globally, countries with VATs generally tax the import of goods and completely refund any VAT borne by exported goods. The imposition of a broad-based property tax on real estate ownership has also been a purported but elusive goal for a number of years.
