The long-anticipated value-added tax pilot test plan for the central China provinces was released May 18 amid assurances that such the pilot test will cut tax burdens, encourage investment expansion, and boost industrial structure upgrading of the enterprises in central provinces.

Authorities believe that the pilot test will cut production cost in 8 sectors by one-sixth to one-seventh. According to the plan, released on the SAT website, starting July 1, 2007 the VAT deduction range will expand across eight sectors in 26 old industrial base cities in the six central China provinces of Anhui, Henan, Hubei, Hunan, Jiangxi and Shanxi.