At the national financial conference held on December 25, 2011, the Minister of Finance Xie Xuren said that in 2012, various policies to reduce the tax burden on small and micro enterprises, such as raising value-added tax and business tax threshold, will continue to be implemented.
The news of continued tax cuts has undoubtedly given way to a large number of domestic small businesses in the “preparation for winter†state. In the past 2011, for the traditional textile and garment industry, it suffered from various difficulties. Inadequate orders and rising costs caused heavy tax burdens that the industry could not afford. The news of tax cuts became the heart of the textile industry. The root of hope for "life-saving straw."
Endangering the industry's "heavy"
Zhang Jie is the chairman of China Hengtian Group Co., Ltd. His company achieved sales of 30 billion yuan in 2011, but this textile tax alone amounts to 500 million yuan, which does not include exports. tax.
“In 2011, the corporate value-added tax rate was 17% and the tariff rate was 6%. The tax rate for various taxes increased by 30%. In addition to taxes, the annual profit was only 3% to 5%,†said Zhang Jie.
According to Zhang Jie’s calculations, all taxes paid by enterprises in 2010 have already accounted for about 5% of total sales, and the income is equivalent to the company’s sales for two months.
Severe tax burdens make companies "overwhelmed." Zhang Jie said that although starting from 2010, the state relaxed the methods for the collection of export taxes and customs duties, the current tax rate for value-added tax and business tax is still very high, and the domestic economic environment since 2011 is not good, but the production cost of enterprises is still relatively low. Last year increased by about 20%.
According to a survey conducted by the All-China Federation of Industry and Commerce on SMEs in 17 provinces and cities, in the first half of 2010, domestic circulation taxes accounted for 60% to 70% of total tax revenue, of which VAT was 24.8%, consumption tax was 7.5%, and business tax accounted for 14.3%.
During the interview, many entrepreneurs also stated that compared with large-scale and large-scale management enterprises such as China Hengtian, the SMEs with poor anti-risk ability have apparently come to a standstill if the overall environment continues to deteriorate. The industry shuffle will come soon.
Hu Xianguang, head of Hangzhou Dingmao Textile Co., Ltd., calculated an account for the reporter: In 2011, the company’s sales were 10 million yuan. After deducting the cost and various taxes, the actual profit of the company was only 2 million yuan, compared to many companies. Loss situation, this figure is still relatively good results.
However, Hu Xianguang also stated that the pressure in 2011 was largely due to taxes turned over. In the 8 million yuan expenditure project, employees’ salaries, rising raw materials, equipment renewal, business training, and other expenditures were almost equal to half of the tax paid. Originally, the company 2011 The year will require the addition of automated assembly line equipment, but it is now only possible to postpone the plan.
"Since 2011, international cotton prices have been on an upward path. With the halt of cotton exports by major cotton exporting countries such as India, domestic cotton prices will hardly fall in the short term. In this case, the cost of raw material procurement for enterprises will not be obtained in the short term. Significantly improved, as companies, can only increase profits through other means.†Zhang Yongxin, China Textile Industry Association believes. According to statistics, the textile industry, which is an important pillar of the Chinese economy, exports more than one-fifth of the total amount of foreign exchange earned through exchanges of foreign exchange earned by exports of goods from the country, and the employed population of the entire industry exceeds 20 million.
Liu Zu, researcher of the State Tax Administration Bureau of Taxation Research, said: “In the future, the implementation of structural tax reduction will be accompanied by the increase of VAT and business tax threshold. According to the calculation of the State Administration of Taxation, after the series of tax reductions, the corporate income tax burden Will reduce the average 40%."
VAT expansion "encirclement"
In addition to the textile industry, Liu Tong, deputy dean of the Taxation Institute of the Central University of Finance and Economics, believes that the production and service industries, cultural and creative industries, and forensic service industries will be the beneficiaries of this tax reform.
It is understood that during the "12th Five-Year Plan" period, China will expand the scope of VAT collection, and accordingly reduce business tax and other taxes to "improve taxation policies that are conducive to the upgrading of industrial structure and the development of the service industry."
Starting from January 1, 2012, China will carry out business tax levy VAT pilots in Shanghai's transportation industry and some modern service industries.
VAT expansion to “encirclement†and reduction of business tax is also considered as an important part of structural tax reduction. For a long time, the scope of value-added tax reform has not covered the transportation and logistics industries. After the implementation of the new taxation system, the logistics industry will uniformly pay 6% VAT.
Xie Xuren, the Minister of Finance, also said earlier that the implementation of the pilot reform of the business tax reform to the VAT reform in some fields of production and commerce is an important measure for the improvement of China's VAT system. He emphasized that China will gradually solve the problem of uncoordinated taxation policies for goods and services from the institutional perspective. It will steadily expand the pilot scope of the business tax levy for VAT and promote the development of the service industry, especially the modern service industry.
In this regard, Zhang Jie thinks: “Apparel is a creative industry. We do a clothing creative industry park, construct a new consumer business model, and enhance people’s consumption values ​​and levels. This is to innovate in the traditional business.†According to data, by 2020, The proportion of cultural and creative industries will account for 8% to 10% of GDP. The implementation of fiscal and taxation reform in this industry will strongly promote the development of the industry.
“Assurance service industry is also an intermediary organization and the future will also be an industry for tax and fee reform,†said Dean Liu, who believes that many departments now need to generate consulting fees through intermediaries. However, these agencies do not have unified tax administration. If the levy is uniformly based on VAT, the tax rate is very high. According to the business tax, some organizations do not have special invoices for business tax, which cannot be deducted later. Therefore, after the VAT reform, the departments that use these services will be greatly benefited. .
“While structural tax reductions will cause fluctuations and adjustments in some industries in the short term, in the long run, the entire industrial structure and economic structure will form a positive interaction because the characteristics of turnover taxes are collected from the entire process of production to sales. The repeated collections caused by the process are very stressful for the enterprise, so if the entire economy is not affected after the tax reduction, the enterprises will have more autonomy and will play an active role in the overall economic environment." Zhou Jianbo, associate professor of Peking University School of Economics, believes.
The news of continued tax cuts has undoubtedly given way to a large number of domestic small businesses in the “preparation for winter†state. In the past 2011, for the traditional textile and garment industry, it suffered from various difficulties. Inadequate orders and rising costs caused heavy tax burdens that the industry could not afford. The news of tax cuts became the heart of the textile industry. The root of hope for "life-saving straw."
Endangering the industry's "heavy"
Zhang Jie is the chairman of China Hengtian Group Co., Ltd. His company achieved sales of 30 billion yuan in 2011, but this textile tax alone amounts to 500 million yuan, which does not include exports. tax.
“In 2011, the corporate value-added tax rate was 17% and the tariff rate was 6%. The tax rate for various taxes increased by 30%. In addition to taxes, the annual profit was only 3% to 5%,†said Zhang Jie.
According to Zhang Jie’s calculations, all taxes paid by enterprises in 2010 have already accounted for about 5% of total sales, and the income is equivalent to the company’s sales for two months.
Severe tax burdens make companies "overwhelmed." Zhang Jie said that although starting from 2010, the state relaxed the methods for the collection of export taxes and customs duties, the current tax rate for value-added tax and business tax is still very high, and the domestic economic environment since 2011 is not good, but the production cost of enterprises is still relatively low. Last year increased by about 20%.
According to a survey conducted by the All-China Federation of Industry and Commerce on SMEs in 17 provinces and cities, in the first half of 2010, domestic circulation taxes accounted for 60% to 70% of total tax revenue, of which VAT was 24.8%, consumption tax was 7.5%, and business tax accounted for 14.3%.
During the interview, many entrepreneurs also stated that compared with large-scale and large-scale management enterprises such as China Hengtian, the SMEs with poor anti-risk ability have apparently come to a standstill if the overall environment continues to deteriorate. The industry shuffle will come soon.
Hu Xianguang, head of Hangzhou Dingmao Textile Co., Ltd., calculated an account for the reporter: In 2011, the company’s sales were 10 million yuan. After deducting the cost and various taxes, the actual profit of the company was only 2 million yuan, compared to many companies. Loss situation, this figure is still relatively good results.
However, Hu Xianguang also stated that the pressure in 2011 was largely due to taxes turned over. In the 8 million yuan expenditure project, employees’ salaries, rising raw materials, equipment renewal, business training, and other expenditures were almost equal to half of the tax paid. Originally, the company 2011 The year will require the addition of automated assembly line equipment, but it is now only possible to postpone the plan.
"Since 2011, international cotton prices have been on an upward path. With the halt of cotton exports by major cotton exporting countries such as India, domestic cotton prices will hardly fall in the short term. In this case, the cost of raw material procurement for enterprises will not be obtained in the short term. Significantly improved, as companies, can only increase profits through other means.†Zhang Yongxin, China Textile Industry Association believes. According to statistics, the textile industry, which is an important pillar of the Chinese economy, exports more than one-fifth of the total amount of foreign exchange earned through exchanges of foreign exchange earned by exports of goods from the country, and the employed population of the entire industry exceeds 20 million.
Liu Zu, researcher of the State Tax Administration Bureau of Taxation Research, said: “In the future, the implementation of structural tax reduction will be accompanied by the increase of VAT and business tax threshold. According to the calculation of the State Administration of Taxation, after the series of tax reductions, the corporate income tax burden Will reduce the average 40%."
VAT expansion "encirclement"
In addition to the textile industry, Liu Tong, deputy dean of the Taxation Institute of the Central University of Finance and Economics, believes that the production and service industries, cultural and creative industries, and forensic service industries will be the beneficiaries of this tax reform.
It is understood that during the "12th Five-Year Plan" period, China will expand the scope of VAT collection, and accordingly reduce business tax and other taxes to "improve taxation policies that are conducive to the upgrading of industrial structure and the development of the service industry."
Starting from January 1, 2012, China will carry out business tax levy VAT pilots in Shanghai's transportation industry and some modern service industries.
VAT expansion to “encirclement†and reduction of business tax is also considered as an important part of structural tax reduction. For a long time, the scope of value-added tax reform has not covered the transportation and logistics industries. After the implementation of the new taxation system, the logistics industry will uniformly pay 6% VAT.
Xie Xuren, the Minister of Finance, also said earlier that the implementation of the pilot reform of the business tax reform to the VAT reform in some fields of production and commerce is an important measure for the improvement of China's VAT system. He emphasized that China will gradually solve the problem of uncoordinated taxation policies for goods and services from the institutional perspective. It will steadily expand the pilot scope of the business tax levy for VAT and promote the development of the service industry, especially the modern service industry.
In this regard, Zhang Jie thinks: “Apparel is a creative industry. We do a clothing creative industry park, construct a new consumer business model, and enhance people’s consumption values ​​and levels. This is to innovate in the traditional business.†According to data, by 2020, The proportion of cultural and creative industries will account for 8% to 10% of GDP. The implementation of fiscal and taxation reform in this industry will strongly promote the development of the industry.
“Assurance service industry is also an intermediary organization and the future will also be an industry for tax and fee reform,†said Dean Liu, who believes that many departments now need to generate consulting fees through intermediaries. However, these agencies do not have unified tax administration. If the levy is uniformly based on VAT, the tax rate is very high. According to the business tax, some organizations do not have special invoices for business tax, which cannot be deducted later. Therefore, after the VAT reform, the departments that use these services will be greatly benefited. .
“While structural tax reductions will cause fluctuations and adjustments in some industries in the short term, in the long run, the entire industrial structure and economic structure will form a positive interaction because the characteristics of turnover taxes are collected from the entire process of production to sales. The repeated collections caused by the process are very stressful for the enterprise, so if the entire economy is not affected after the tax reduction, the enterprises will have more autonomy and will play an active role in the overall economic environment." Zhou Jianbo, associate professor of Peking University School of Economics, believes.
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