[VO]: 

On January 1, 2012 tax reforms started being implemented in transportation, R&D, IT, logistics and a few other sectors as part of a pilot in Shanghai. And in April of this year, radio, film and television sectors were added to the pilot. From tody on, there are over 2.3 million taxpayers who fall within the program. The Central Government is saying that in 2013 the reforms will result in corporate tax cuts of over 120 billion yuan. and medium and small enterprises along with self-employed taxpayers may reduce tax rate up to more than 40%. However, there are still some doubts and complaints from some industries. 

Although the overall tax burden will decrease, for some labor intensive enterprises such as those in logistics and film, tax burdens increased after the pilot program rather than decreasing. And the film industry is yet another example of increased tax burdens resulting from this reform. Yesterday, a debate between China Film Group and American Film Studios grabbed headlines. After the new value-added tax, the state-owned enterprise China Film Group decided to levy the new extra 2% value-added tax on Hollywood films exported from American Film Studios. 

Will Chinese businesses enjoy VAT and business tax exemptions? The issue will be a hot topic of discussion. According to the China Securities Journal, Zhang Bin, the director of Institute of Finance Tax, Strategic Research at Chinese Academy of Social Sciences said, the new tax policy will have a significant impact on labor-intensive sectors . However, in the long run it could help economic restructure and increase business vitality in China.