The government yesterday announced that it would cut value-added tax (VAT) for all industries from Jan 1 to reduce the tax burden on companies by more than 120 billion yuan ($17.6 billion) next year.

The State Council, in an executive meeting, passed revised regulations on VAT, consumption tax and business tax. It is part of a stimulus package of 4 trillion yuan ($586 billion) to be spent by the end of 2010.

The revision is aimed at a shift from the existing production-based to a consumption-based VAT regime, which would enable companies to get tax deductions on spending on fixed assets, the meeting said.