Chinese lawmakers on Dec 25 voted to adopt a law on value-added tax (VAT), the largest tax category in China, marking major progress in enforcing the principle of law-based taxation.
The law, passed at a session of the Standing Committee of the National People's Congress, the national legislature, will take effect on Jan 1, 2026.
Currently, 14 out of the 18 tax categories in effect in China have already been legislated, covering the majority of tax revenue.
The VAT law specifies tax rates and taxable amounts, maintaining the three current rates of 13 percent, 9 percent, and 6 percent, with a zero tax rate applied to certain goods and services exports.
"The VAT legislation maintains the current statutory tax rates: 13 percent for goods, 9 percent for sectors like transportation, postal, communication, real estate, and construction, and 6 percent for services," said Shi Zhengwen, director of the Fiscal and Taxation Law Research Center of China University of Political Science and Law.
In terms of tax collection management, the VAT law clarifies that VAT will be collected by tax authorities, while customs will handle VAT for imported goods.
Additionally, for the first time, the law specifically outlines an invoicing management system, emphasizing the promotion of electronic invoices and strengthening data-driven tax administration.
"Electronic VAT invoices aim to provide timely access to tax-related information from business operations. The goal is to establish a tax information-sharing mechanism and coordination system. Under the 'data-driven tax administration' model, VAT collection will ultimately support high-quality development, social fairness, and market unity," said Shi.
VAT law to take effect in 2026, with current rates unchanged
UN Secretary-General Antonio Guterres has renewed his urgent call for an end to the Middle East conflict to prevent the worsening global hunger crisis, Farhan Haq, deputy spokesperson for the UN Secretary-General, said at the UN headquarters in New York on Tuesday.
Speaking at a press briefing, Haq quoted the UN Chief as saying that amid the escalating tensions in the Middle East, diplomacy must prevail.
He also cited the warnings from UN agencies that the conflict in the Middle East is feared to plunge tens of millions more into food insecurity. "The secretary general asserts once more that the war in the Middle East must stop, diplomacy must prevail, all Security Council resolutions must be implemented. The latest one, Resolution 2817, must be respected as we see that countries in the Gulf continue to be targeted," Haq said.
"And the World Food Program (WFP) is warning today that the total number of people around the world facing acute levels of hunger could reach record numbers in 2026 if the escalation in the Middle East continues to destabilize the world's economy. New analysis by WFP estimates that almost 45 million more people could fall into acute food insecurity or worse if the conflict does not end by the middle of the year, and if oil prices remain above 100 dollars a barrel. These would add to the 318 million people around the world who are already food insecure," he said.
Haq also highlighted the strategic significance of the Strait of Hormuz, noting that the key to restoring its safe and secure operation lies in bringing an end to the conflict.
He said that UN Secretary-General Antonio Guterres would travel to Brussels later on Tuesday for urgent consultations with European officials on navigation through the Strait of Hormuz and follow-up safeguard measures.
UN chief renews urgent call for end to Middle East conflict to prevent worsening global hunger crisis
