In order to boost domestic demand, reduce the tax burden on com- panies,encourage technological upgrades and push for industrial restructuring,China decided to extend its value-added tax(VAT)reform to all industries nationwide beginning Janu- ary 1,2009. In order to boost domestic demand, reduce the tax burden on com- panies, encourage technological upgrades and push for industrial restructuring, China decided to extend its value-added tax (VAT) reform to all industries nationwide beginning Janu-ary 1,2009.