On 30 january 2026, the ministry of finance, the directorate general of taxes, issued official proclamation no. 10 of 2026, “(vi) circular of the ministry of finance, the directorate general of taxes of the state, on the comprehensive roll-out of the turnover tax and the conversion of the value added tax pilot (fiscal tax [2016]) annex 2 “provisions relating to the conversion of the turnover tax to the value-added tax pilot project”, “the general taxpayer may choose to apply a simple method of tax collection for construction services provided by a” and “notice from the ministry of finance of the general tax administration on the pilot policy for the upgrading of camps, such as construction services” (2017) (58) “for the construction contract unit, which provides engineering services for the foundations and foundations of the building, the main structure, and for the construction unit, which procures all or part of the steel, concrete, building materials, prefabricated units, the application of a simple tax method for the collection of taxes” has been suspended since 1 january 2026, and the taxpayer's projects for which the simple tax method was applied until 1 january 2026 continue to be implemented in accordance with the original policy”
The core impact of policy change is ultimately reflected in project tax and cost. For example, in the case of conventional construction projects, simple tax collection is compared to general tax collection as follows:
Assuming a total tax price of $10 million, the project will pay $5 million for a:
(a) a simple tax under the old policy: taxable amount = (10-5 million) ÷10. 3 x 3 per cent ÷145. 6 million, no advance credit and simple accounting
Under the new policy, a general tax is applied to the same item: the amount of the tax paid = 10 million ÷10. 9 x 9 per cent =8257 million, and the actual value added tax is paid in the amount of $125. 7 million if the outstanding invoice can be set off; if the proceeds are not managed properly, the actual tax burden will increase significantly。
In the face of policy changes to eliminate taxes on supplies, construction firms and price earners need to adjust their work in a multidimensional manner to achieve a tax balance and cost control:
Reconstruct the terms of the contract to avoid price-fixing disputes. In entering into contracts with construction units, it is necessary to clearly define the range of supplies, the settlement price, the subject matter and the manner in which the invoices are issued, to re-establish the terms of the tax formula, the principal of the tax liability, the price adjustment mechanism, etc., and to avoid price disputes arising from changes in tax rules from the source。
A supply was purchased by the construction unit and the purchase of the purchase invoice was self-inflated, and the contractor was no longer involved in the a supply tax credit, which could be taxed and paid only for its own installation services, self-purchase support, rental of machinery equipment, subcontracting services, etc. New projects should be carried out strictly in accordance with the current rules on pricing and taxation, during the bidding, contracting and costing phases, and should be harmonized to avoid risks such as miscalculation of taxes and loss of control over costs as a result of inconsistent rules。
2. Reinforcement of progress management and lowering of the real tax burden. Full consolidation of all types of cost expenditure, such as primary materials, ancillary materials, machine leasing, subcontracting, etc., giving priority to general taxpayers as qualified suppliers, obtaining full purchase invoices of 9 per cent and 13 per cent tax rates, maximizing the amount of the deduction and effectively reducing the overall actual tax burden of the project。
3. Optimization of cost measurement to safeguard the reasonableness of the offer. When preparing pre-bid cost measurements, bid offers, pricers consistently measure taxes at 9 per cent rates, fully integrate the entry deductions, accurately account for the actual cost of the project throughout its life cycle and avoid the loss or under-competitiveness of the offer due to tax measurement deviations。
Improved professional competence and risk management throughout the process. Price builders, who are key players in policy setting, must master policy by-laws, master core skills such as tax measurement, tax measurement, contract tax planning, and in-depth participation in bidding, contract signing and clearing audit processes to provide professional support for enterprises to effectively manage cost risks and achieve optimal tax balance。
