Chinese Premier Li Keqiang presiding over a meeting of the State Council. Photo: AFP

China has announced new tax reforms beginning this summer that will reduce the tax burden on corporations and consumers by US$55.2 billion, according to a government statement.

The statement, released following a State Council meeting on Wednesday, said the reforms will streamline the value-added tax (VAT) structure and reduce VAT on agricultural products and natural gas from 13% to 11%.

The taxable earnings ceiling for small enterprises to receive a 5% discount has been raised to 500,000 yuan from the current level of 300,000, and tax breaks will also be extended to startups and small and medium-sized enterprises in the tech sector.

The new reforms, along with last year’s business tax overhaul, will result in total reduction in taxes of around US$55.2 billion, according to the statement.