…Value Added Taxes aren’t all they’ve been cracked up to be. The Wall Street Journal reports
China has removed a value-added tax on vegetable distribution retroactively to Jan. 1 as part of efforts to curb rising food prices, which have contributed to inflationary pressure over the past year.
Lifting the VAT on vegetables will lower production costs for wholesale retailers, who typically pass such costs on to consumers.
“The lower costs benefit distribution companies, especially vegetable wholesalers,” said Gao Wang, an analyst at Beijing Orient Agribusiness Consultant Ltd.
A year ago, Beijing launched a wide-ranging government drive to increase food supplies, and had taken aim at improving the nation’s agricultural production distribution as part of that effort.