SMM News: from January to April, Guangdong added a total of 67.27 billion yuan in tax cuts, with the manufacturing industry ranking first in all industries, reaching 6.14 billion yuan. Guangdong will also explore further tax cuts and fees within the scope of local tax power, and will raise funds to make up for the reduction in financial security.
This year, Guangdong Huaxing Glass Co., Ltd. is prepared to increase investment to speed up technological innovation and production line upgrading. Feng Qunying, vice president of corporate finance, said the plan and ability was due to tax cuts and fee cuts. The enterprise, which has an annual output value of about 6.7 billion yuan, can save 43 million yuan in value-added tax and additional taxes this year. "it has helped us invigorate the funds."
Huaxing glass is not alone. On June 5, the Guangdong Provincial Government disclosed at a news conference on tax cuts and fees that a total of 67.27 billion yuan in tax cuts were added to the province from January to April. As the "main force" of this round of tax reduction and fee reduction, the value-added tax reform has achieved remarkable results, with tax cuts exceeding $10 billion in the first month of the first month, and manufacturing tax cuts ranked first among all industries, reaching 6.14 billion yuan.
Chen Zhongming, deputy director of the Guangdong Provincial Taxation Bureau of the State Administration of Taxation, said that with the centralized realization of a series of policy dividends, the burden of taxes and fees on the main body of the Guangdong market has been significantly reduced, thus producing many effects and supporting the development of the real economy and private enterprises. Promoting enterprise innovation, stimulating the development of emerging industries and stimulating domestic demand to boost consumption are also reflected in the economic data for the same period.
The 21st Century Economic News reporter learned that Guangdong will also explore further tax cuts and fees within the scope of local tax power, and will raise funds through various channels to make up for the reduction in financial security, including raising the financial proportion of state-owned enterprises to 30 percent.
Value-added tax reform reduced by more than 10 billion in the first month
As a major economic province, Guangdong has achieved remarkable results in reducing taxes and fees. From January to April, Guangdong Province increased tax cuts by 67.27 billion yuan. In the same period, the country increased tax cuts by 524.5 billion yuan, accounting for about 13 per cent in one province of Guangdong.
From the perspective of composition, the cumulative new tax reduction of 67.27 billion yuan in Guangdong from January to April mainly comes from three aspects: the new tax reduction policy issued in 2019 increased the tax reduction by 24.14 billion yuan, and the tax reduction policy implemented in 2018 and ended in 2019 increased by 42.8 billion yuan. The tax cuts extended in 2018 and extended in 2019 increased by 330 million yuan.
Among the new tax cuts introduced in 2019, the value-added tax reform implemented on April 1 has been very powerful, with a tax reduction of 13 billion yuan in the first month of the year, or 27.3 per cent of the tax reduction. In the same period, the national figure was 111.3 billion yuan, with Guangdong accounting for about 12 per cent.
"deepening VAT reform is the 'main course' in the 'big meal' of tax cuts and fees this year." Chen Zhongming said that the effect of tax cuts in the manufacturing industry is the most obvious. Judging from the implementation effect in the first month, the manufacturing industry reduced VAT by 6.14 billion yuan, accounting for 47.2 percent of the total reduction, ranking first among all industries.
Many manufacturing industries have benefited from the burden reduction, including some pillar industries in Guangdong. The data show that the tax reduction effect of Guangdong equipment manufacturing industry is the most prominent in this VAT reform. Eight equipment manufacturing industries have reduced VAT by a total of 2.91 billion yuan, accounting for 47.4 percent of the total VAT reduction in the manufacturing industry. Among them, the computer, communications and other electronic equipment manufacturing industry reduced the tax by 990 million yuan and the automobile manufacturing industry by 630 million yuan, making it the two industries with the most significant tax reduction effect.
Yang Xiaoqiang, a professor at Sun Yat-sen University Law School, has been tracking VAT in 165 countries since 2008. The average VAT standard value of these countries is 14.89%. The 13% VAT tax rate of manufacturing industry in China shows determination and boldness.
Ning Ling, executive director of the Guangdong Coastal Economic Zone Development Research Institute, said that this round of tax reduction and fee reduction policy is clear and easy to operate.For example, the manufacturing VAT directly starts with the reduction of the tax rate, coupled with the deepening of "releasing management and clothing," which has also reduced the time and economic costs of enterprises.
Many manufacturing enterprises have a strong sense of achievement in this round of load reduction.
"our company reduced VAT by about 940000 yuan in April and is expected to reduce it by about 15 million yuan for the whole of this year." Zhou Yongchong, chief financial officer of Guangdong Tuosta Technology Co., Ltd. Headquartered in Dongguan, Tuosta is the current leading enterprise of industrial robots in China, which has developed rapidly in recent years.
The deputy general manager of Guangqi Group Co., Ltd. said that with the implementation of the tax reduction and fee reduction policy this year, especially the value-added tax rate, the entire Guangzhou Automobile Group is expected to reduce taxes and fees by more than 2 billion yuan. Judging from the new Guangzhou Auto New Energy Company, which was newly set up by the group, a reduction in the value-added tax rate alone can directly reduce the burden by more than 20 million yuan.
In addition to lowering the tax rate, a series of supporting measures have been implemented in the reform of value-added tax in Guangdong to further strengthen the effect of reducing the burden. Specifically, it includes expanding the scope of VAT input tax deduction, including domestic passenger transport services, and allowing one-time deduction of real estate; We will try out the tax rebate system at the end of the period, refund the incremental tax allowance of taxpayers according to the conditions, in order to effectively increase the cash flow of enterprises, increase and offset the input tax of production and living services, and so on.
"these practices are intended to constitute a package of policy measures that will ultimately ensure a significant reduction in the tax burden in major industries, a reduction in the tax burden in some industries, and a reduction in the tax burden in all industries." Chen Zhongming said.
The real economy and private enterprises benefit the most
The effect of tax reduction and fee reduction is rapidly transmitted to the deep level of economic operation.
Chen Zhongming said: with the landing of the large-scale tax reduction and fee reduction policy one after another, the macro tax burden in Guangdong has dropped from the same period last year, and the tax burden on the main body of the market has been significantly reduced, resulting in an overall tightening of the external economic environment and downward pressure on the economy. Stabilized market confidence. As of May, the number of normal tax registrations in Guangdong province had increased by 11.5 per cent year-on-year.
From the perspective of industry, the real economy and producer services benefit the most from the new reduction of individual income tax excluding natural persons. From the perspective of enterprise type, private enterprises and individual industrial and commercial households are the main beneficiaries. This is also directly reflected in the economic data for the same period. From January to April, the added value of private industrial enterprises in Guangdong increased by 8.6% compared with the same period last year, which was significantly higher than that of the whole.
More importantly, the tax cuts have also promoted corporate innovation and stimulated the development of emerging industries. This is mainly manifested in alleviating the financial pressure of enterprises and creating space for increasing technological transformation and research and development. In the first quarter of this year, investment in industrial technological transformation in Guangdong increased by 11% compared with the same period last year, reversing the trend of negative growth for more than one month since 2018.
Zhang Chuanwei, chairman and chief executive of Mingyang Wisdom Energy Group Co., Ltd., calculated that the enterprise is expected to reduce taxes and fees by nearly 200 million yuan in the past two years. "this money can build four robot blade production lines or develop two large wind turbines."
In addition, relaxing the income tax standards for small and micro enterprises and increasing the preferential efforts for enterprise income tax have generally reduced the tax burden on small and micro enterprises, especially high-tech emerging industries, and the inclusive policy of Guangdong small and micro enterprises increased by 6.58 billion yuan from January to April.
Guangdong Xuan Jia Medical products Health Technology Co., Ltd. is expected to reduce the burden of VAT by 1.5 million yuan this year. Zhang Jiaheng, chief scientist of the company, said the money is being used to set up research and development institutions to increase product technological innovation.
Yao Fengmin, a professor at Guangdong University of Finance and Economics, analyzed that the new round of tax reduction and fee reduction is a "reduction" of government revenue in exchange for an "increase" in economic and enterprise efficiency, and that enterprises can take part in market activities "lightly" in order to promote the economy to turn to high-quality development.
In addition, Guangdong's personal income tax reform increased tax cuts by 32.44 billion yuan from January to April. Of this total, we will increase the basic reduction of fees and charges and adjust the tax rate by 29.38 billion yuan, and the special additional deduction policy will increase the tax reduction by 3.06 billion yuan.
Through the price transmission mechanism and market game, tax reduction dividends are shared by production and marketing enterprises and consumers. For example, VAT tax reduction will be conducive to the decline of end product prices, and the two effects will further stimulate domestic demand and boost consumption. From January to April, retail sales in Guangdong Province increased by 6.5%, and catering income increased by 8.4%.
However, this is only a phased effect. Chen Zhongming revealed that in the next step, Guangdong will continue to strengthen the study of tax and fee policies and turn policy dividends such as tax cuts and fees into a driving force for optimizing the economic structure and expanding effective demand.
Will large-scale tax cuts pose pressure and challenge to financial resources? In this regard, Zhong Wei, chief accountant of the Guangdong Provincial Department of Finance, said that Guangdong will "increase revenue and reduce expenditure" in many ways, including raising funds through various channels to make up for the reduction in revenue, such as speeding up the revitalization of state-owned assets resources and cleaning up and disposing of state-owned assets of idle administrative institutions. We will increase the proportion of state-owned enterprises' income turned over to finance to 30 percent, continue to clean up and invigorate the financial stock of funds, and establish a system of regular recovery.
"at the same time, party and government organs have taken the lead in living a tight life and vigorously reducing general expenditure. The general expenditure at the provincial level has been uniformly reduced by 5 percent, and the funding for the 'three public' has dropped by 10.7 percent over the previous year." Zhong Wei said: in the next step, we will also pay close attention to the impact of tax cuts and fees on fiscal operation to ensure the smooth operation of the province's fiscal revenue and expenditure, and that various tax and fee reduction policies will be fully implemented.