CHENGDU, Dec. 1 (NBD) -- 96.5 billion yuan (about 14 billion US dollars) had been saved for companies by the end of October since the value-added tax (VAT) system was rolled out nationwide in May in place of business tax after successful pilots in China, according to a statement released after a meeting chaired by Premier Li Keqiang on Tuesday. 

From May to October, taxes continued to drop in construction, real estate, finance and consumer services, which have seen an increase of 530,000 tax payers. All 26 economic sectors covered by the VAT program have seen their taxes reduced. 

The meeting also decided that VAT revenues will be redistributed to local governments proportionately. This aims to encourage both central and local departments to participate in the tax reform, as well as lending support to underdeveloped regions' fiscal capacity.

Feng Qiaojun, professor of Economics Department at Chinese Academy of Governance, told NBD that the redistribution is an incentive as the more the VAT accumulated by the local governments, the more redistributions local government can receive.