Oct. 27 (Bloomberg) -- China Eastern Airlines Corp. and Shanghai International Airport Co. rallied more than 2 percent in Shanghai after the central government signaled it will lower value-added taxes for Shanghai’s service industries.
China Eastern, the nation’s second-largest carrier, rose 3.5 percent to 4.79 yuan as of 9:42 a.m. local time. Shanghai Airport, operator of China’s busiest airfield, advanced 2.9 percent to 13.35 yuan. Shanghai International Port (Group) Co., the operator of the world’s second-busiest harbor, climbed 3.5 percent to 3.23 yuan.
The two new VAT rate categories will be 11 percent and 6 percent, according to a statement posted on the government’s website after a meeting chaired by Wen Jiabao. The rates will be in addition to the existing VAT brackets of 17 percent and 13 percent. China may expand the trial nationwide, the statement said. The reforms may reduce taxes on service industries by 72 billion yuan, Zhu Jianfang, an economist at Citic Securities Co., wrote in a note today.
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