"I have noticed some reports on this. Hotel operators adjusting their hotel prices is totally a management behavior and has nothing to do with our tax reform," Lou said.
Lou says replacing the business tax with a value-added tax won't add burdens to hotel operators. Hotels with annual revenues of less than 5 million yuan will be levied a value-added tax rate of 3 percent. That's down 40 percent from their previous 5 percent tax rate. Hotels with annual revenues of more than 5 million yuan will be levied a value-added tax rate of 5.66 percent. That's also lower than their previous 6 percent tax rate.
Minister Lou says the reforms will actually lower operational burdens for hotels. He says allegations of room price hikes due to the reforms are groundless.