The adjustment of value-added tax by China Telecom affects revenue and profit

CHINA TELECOM (00728.HK) announced that the adjustment of the applicable scope of value-added tax for telecommunications services will have an impact on the group's revenue and profit. The company will fully implement the strategy of transforming cloud into intelligence, accelerate the construction of technology-based enterprises, comprehensively promote AI+ actions, continuously create an integrated intelligent cloud service of "computing power + platform + data + model + application," and promote quality improvement, cost reduction, and efficiency enhancement, continuously advancing high-quality development of the enterprise.

Recently, the Ministry of Finance and the State Administration of Taxation issued a notice on the specific scope of value-added tax collection, stipulating that starting from January 1, the business activities in China that provide mobile data services, SMS and MMS services, and internet broadband access services using fixed networks, mobile networks, satellites, and the internet will have their applicable tax category adjusted from value-added telecommunications services to basic telecommunications services, with the corresponding value-added tax rate adjusted from 6% to 9%