China Plans New Value-Added Tax System

China is planning a new value-added tax system that may help companies save as much as 150 billion yuan ($22 billion) a year, the South China Morning Post reported, citing people it didn't identify.

Under the plan, as of next year the country's 8 million companies will be allowed to use fixed-asset investments to offset valued-added tax payable to the government, the Hong Kong newspaper reported today. That may encourage more investment in industries affected by slowing economic growth, it said.

The Ministry of Finance and the State Administration of Taxation are proposing the State Council expands a 2004 trial in the country's northeast, the report said.