China Value-Added Tax on Telecom May Cut Carrier Profits

Premier Li Keqiang said China will impose a value-added tax on telecommunication services, a move analysts said may cut earnings at the country’s three major wireless carriers.

The VAT will replace an existing business tax as part of a national trial also applied to railway transportation and postal services, Li said in a report delivered today at the start of the annual meeting of China’s legislature, the National People’s Congress. Li didn’t say when the VAT would start or offer other details.