Jiangsu Accounts For The Largest Reduction In Value Added Tax Pformation

VAT pformation has its own accounts.

At present, provinces and autonomous regions are estimating the impact of this reform on their "pocketbook" reduction.

This newspaper has obtained some measurement reports in some areas. The results show that Jiangsu believes that its reduction is the biggest, and the West may benefit most. Shenzhen believes that the tax reform fits the industrial upgrading process of the city.

The implementation of VAT has entered the countdown.

Previously, the Ministry of finance estimated that the total value added tax pformation would be reduced by about 150 billion yuan.

Since the current implementation plan of VAT has been submitted to the State Council (see our newspaper in September 1st, the tax reduction 150 billion VAT pformation will be implemented next year), some places expect to seize the last opportunity to win favorable policies.

In the second half of 2004, after the delay of more than half a year, the pilot project of VAT pformation was launched in a city in three provinces in Northeast China.

The pformation of value-added tax is actually converting production value-added tax into consumption value-added tax.

Before the implementation of the VAT reform, the financial loss figures reported by the three northeast provinces were about 12 billion yuan -150 billion yuan, but after a year of trial, the Northeast officials found that the actual tax deduction was 2 billion 766 million yuan, accounting for 3.61% of the total value added tax revenue of the three provinces in the same period.

Since then, the rate of deduction for the three cities in Northeast China has been developing at a constant speed. As at the end of 2006, a total of 9 billion 62 million yuan of value added tax has been deducted. If it is deducted in full, it will reach 12 billion 190 million yuan.

For such a result, Liaoning provincial Internal Revenue Bureau said in a summary report that in the initial stage of the pilot project in Northeast China, the financial factors were considered too much in the choice of the implementation plan, which weakened the consideration of improving the tax system.

A year later, the director of the Liaoning State Administration of Taxation said at a symposium that they would also encourage better financial markets in private, which could broaden the scope of the industry and take full deduction.

Although the pilot scheme of VAT pformation has limited effect on the economic development of the three northeastern provinces, it has also produced some specific effects.

For example, Shanghai general North Sheng Automobile Co., Ltd. was attracted by the relevant preferential policies of Northeast revitalization. Through participating in the reorganization of the original golden cup General Company, Shenyang has invested 143 million yuan to build Buick business vehicle production line. Since its commissioning in 2004, it has enjoyed 8 million 150 thousand yuan of tax refund for fixed assets input tax.

However, the pilot in Northeast China also shows that the VAT pformation benefits from different business cycle industries.

From the actual implementation of the situation, capacity expansion enterprises are the most beneficial enterprises.

Jiangsu province is a region dominated by manufacturing. The proportion of the second industry is relatively large, and the value added tax has always been in the leading position of its fiscal revenue.

Based on the data in 2002, according to the pilot scheme of VAT reform in Northeast China, eight industries in Jiangsu province acquired fixed assets of 59 billion 843 million yuan, and the deductible input tax was 8 billion 695 million yuan.

If the whole industry is fully deducted from the scheme, the deductible input tax is 15 billion 847 million yuan, accounting for 25.85% of the total value added tax revenue in that year.

Assuming that the average annual growth rate of fixed assets investment in Jiangsu is 15.86%, it is estimated that if the consumption value-added tax is implemented in the whole industry, the average annual value-added tax in the whole province will be reduced by nearly 25 billion yuan in the first 5 years.

In the past 2000-2006 years, the tax revenue of Jiangsu's tax department has increased by only about 20000000000 Yuan per year, which means that the consumption tax will increase the value added tax revenue of Jiangsu.

Therefore, Jiangsu believes that it is the province with the biggest negative effect of VAT pformation.

Nanjing University of Finances and Economics professor Yang Fusheng's research also shows that in the economic structure dominated by the second industry, the impact of VAT pformation is more obvious.