With the reduction of the VAT rate, China's steel industry will benefit from other domestic industries. The author believes that this move is conducive to reducing the tax burden on China's iron and steel enterprises, and will help enhance the competitiveness of China's steel products market and promote the transformation and upgrading of the steel industry. However, the deep-seated conflicts in the value-added tax system of the steel industry have not yet been fundamentally resolved. It is proposed that further adjustments be made to the VAT policies for iron ore and scrap.