Effect Of Unified Enterprise Income Tax Law On Economy

In 1994, Wang Jianxin, Peng Qingxiu, the Ministry of finance, the Ministry of finance, the National Agricultural Comprehensive Development Office, Wang Zheng, the Ministry of finance, the Institute of Fiscal Science, implemented the tax system reform and unified the income tax system of various domestic enterprises.

The unified income tax system for domestic funded enterprises, first, embodies the principle of fair tax burden, creates a fair competition tax environment for all kinds of domestic enterprises; two, straightens out the distribution relationship between state and enterprises; three, standardize and simplify the tax system; four, it is in line with international practice, and is conducive to opening wider to the outside world.

This is undoubtedly a great leap forward in promoting the further standardization, fairness and rationality of enterprise income tax in China.

However, in order to implement the policy of differential opening to the outside world and attract and expand the scale of foreign investment continuously, China still implements a separate income tax law for foreign invested enterprises and foreign enterprises.

At present, the income tax of domestic and foreign-funded enterprises is separately applicable to the Provisional Regulations on enterprise income tax promulgated by the State Council and the law on foreign investment enterprises and foreign enterprises income tax promulgated by the people's Congress. That is to say, there are two sets of enterprise income tax systems for internal and foreign enterprises.

After more than 10 years of operation, although the "two laws" are gradually in line with international practice, there are still some practical problems. Especially after China's accession to the WTO, the two sets of enterprise income tax system of domestic and foreign capital can no longer meet the needs of the socialist market economy and economic globalization.

1., the main problems existing in the income tax system of domestic and foreign enterprises and their unified trend are: (1) according to the source of enterprise capital, whether domestic capital or foreign capital should formulate different income tax systems, so that the tax system is not standardized, and is not conducive to fair competition among enterprises, especially for domestic enterprises. 2., the tax base and income tax rate of 2. enterprises are not unified, resulting in uneven tax burden, making domestic and foreign enterprises in incomplete equal status.

From the actual situation, most of the local tax authorities above a certain level have set up foreign-related tax bureaus. Although the collection and management of foreign-related enterprise income tax and the income tax of domestic enterprises are unified, the actual operation is still two sets of institutions and two sets of systems, which increases the cost of collection and administration, violates the principles of tax administration efficiency and the principle of national treatment of WTO; and 4. of the preferential policies of corporate income tax are too chaotic.

At present, the income tax rate of domestic funded enterprises has the following two provisions: (1) the statutory rate of corporate income tax is 33%; (2) the two rate of care tax: the tax payable for enterprises with an annual taxable income of less than 30 thousand yuan (including this figure) is reduced by 18% tax rate; the annual taxable amount of the enterprise is 30 thousand to 100 thousand yuan (including the number), and the tax rate is reduced by 27%.

Foreign enterprises are applicable to 30% plus 3%, 24% plus 3%, 15% plus 3% tax rate.

Foreign enterprises enjoy preferential tax policies in many aspects, such as: (1) preferential policies for regional tax rates.

Foreign investment enterprises in coastal economic development zones, bonded zones and new and high technology development zones shall enjoy a policy of collecting income tax at a reduced tax rate of 15% or 24%.

(2) regular tax incentives for newly established enterprises.

The foreign tax law stipulates that the newly established productive foreign invested enterprises enjoy a preferential tax policy of "two exemption, three reduction and half" from the profit making year.

(3) encourage reinvestment tax rebate policy and so on.

At the same time, the preferential tax policies for domestic and foreign enterprises not only do not accord with preferential tax policies of domestic and foreign enterprises, but also differ between domestic and domestic enterprises, foreign capital and foreign-funded enterprises.

Moreover, preferential policies are too skew to reflect the lack of industrial policies, resulting in uneven taxation burden between mainland enterprises and coastal enterprises, which is not conducive to narrowing the regional disparity.

In view of the existing problems in China's enterprise income tax, it is imperative to unify the income tax law of domestic and foreign enterprises. In view of the importance and feasibility of the merger of income tax for domestic and foreign enterprises, a consensus has been reached basically across the country.

It is necessary to formulate and promulgate a unified "enterprise income tax law of the People's Republic of China" so as to conform to the WTO rules and meet the needs of the development of China's socialist market economy.

According to the actual tax burden of enterprises in China, the unified enterprise income tax should choose the middle and lower tax rate level, which is more suitable between 24% and 28%. At the same time, the 15% preferential tax rate in the western development area should be retained, the minimum rate should not be less than 15%, the other preferential tax rates should be abolished, and various preferential policies should be regulated.

In accordance with the principle of "preferential industry and regional slant", we should adjust the tax relief policy.

Two, unifying the enterprise income tax law's overall impact on China's economy. (1) favorable areas, 1., for all kinds of enterprises to create an environment of equal competition.

The enterprise income tax law, which is used uniformly in domestic and foreign-funded enterprises, should be formulated to solve the problems of different tax treatment and different tax burden of domestic and foreign capital enterprises so as to enable all kinds of enterprises to compete equally under the condition of fair tax burden. It embodies the Scientific Outlook on Development that "balancing urban and rural development, coordinating regional development, coordinating economic and social development, coordinating the harmonious development of man and nature, and coordinating domestic development and opening up".

Create a more equitable market economy environment for all kinds of enterprises and enhance the vitality and competitiveness of enterprises.

In the long run, it will promote the optimization of tax structure and economic structure and provide a long-term impetus for economic growth.

The 2. is conducive to the rationalization of industrial structure.

China's basic industries are backward, rural roads, pportation, utilities, communications and other infrastructure can not keep up with the needs of economic development, agriculture needs to be developed, the West needs great development, old industrial areas should be reformed, high-tech industries are weak, appeal for social support, and economic development requires the support of industrial policies.

To adapt to this, attracting foreign capital needs to introduce capital and absorb advanced technology to promote China's basic industries, high-tech industries and bottleneck industries.

The unified enterprise income tax law should turn the preferential tax policy from the "regional preference" to the new pattern based on "preferential industries and regional slant", which is consistent with the adjustment direction of China's current industrial policies, and plays a correct guiding role in foreign investment orientation, and improves the uneven development of the basic energy sources industry.

More importantly, China has entered the post WTO pition period. Tariffs will be close to the final level of reduction in two or three years. The non-tariff measures will soon be abolished. The opening of services market will expand rapidly. The regional restrictions, quantity restrictions and share ownership restrictions will be phased out, and domestic enterprises will face more severe challenges of survival.

A unified income tax system for domestic and foreign enterprises will enable domestic enterprises to compete with foreign-funded enterprises on a fair and just basis, which is conducive to improving China's industrial structure.

The 3. is conducive to the balanced development of the regional economy.

At present, preferential policies for foreign-funded enterprises in China are mainly embodied in regional preferential policies. According to the "Special Economic Zone coastal economic development zone - the general area of the mainland", the tax rate is designed from low to high, so the area of foreign investment is mainly distributed in the eastern coastal areas.

It is precisely because foreign-funded enterprises are mainly concentrated in the eastern region, while domestic funded enterprises are mainly concentrated in the central and western regions. The negative impact of unfair taxation of income tax on domestic and foreign enterprises is more serious, the regional gap is widening, and the national economic development is not balanced.

Moreover, the economic development of our country has been greatly different because of historical and geographical reasons. This discriminatory regional preferential policy has further aggravated unfair competition among regions and made the economic development more uneven.

Although the state has increased support for the central and western regions over the years, a series of preferential tax policies have been introduced to the central and western regions, which are more favorable than those in the coastal areas. However, due to the harsh natural conditions in the central and western regions and the backwardness of infrastructure construction, it is still difficult to compete with the eastern coastal areas. Preferential tax policies do not really attract the pfer of funds from the eastern region to the western regions.

The unified corporate income tax has abolished multiple preferential tax rates, standardized various preferential policies, made the preferential tax rate of domestic enterprises converge, eliminated discriminatory treatment of domestic enterprises, and domestic enterprises could compete with foreign-funded enterprises on a fair and just basis, which is conducive to the economic development of the central and western regions.

At the same time, as a result of retaining the preferential tax rate of 15% in the western region, it provides policy support for attracting funds in the western development, and it will surely improve the flow of investment, which is conducive to narrowing the regional disparity and promoting the balanced development of regional economy.

The 4. is beneficial to the tax authorities to levy taxes according to law, regulate management, plug loopholes, and improve the efficiency of law enforcement.

We should unify the income tax law of domestic and foreign enterprises, formulate reasonable tax preferential policies for enterprise income tax, and make the enterprise income tax reduction and exemption management institutionalized and standardized. We must check and check the existing preferential tax policies on income tax for domestic and foreign capital enterprises, strengthen the management of preferential tax policies for enterprise income tax, and avoid the loss of state revenue.

On the other hand, a unified low tax rate will help to reduce the tax burden on enterprises, enhance the stamina of enterprise development, enhance the vitality and competitiveness of enterprises, expand the total amount of economic development, promote the further growth of tax revenues, and lay the foundation for establishing a sound fiscal revenue increase mechanism.

The 5. is conducive to the use of tax tools, the implementation of macroeconomic regulation and control, and the promotion of balanced, coordinated and stable development of the national economy.

1., compared with the original income tax law, the regional preferential policies have been reduced to the western region, the northeast old industrial base, the ethnic minority areas and the less developed areas. This is conducive to the coordinated development of the eastern and western regions. However, enterprises in the eastern coastal developed areas should adjust their industrial direction, upgrade their technological level, produce products that are encouraged by the state, strengthen management and reduce costs, so as to maintain the advantages of development in the two years.

2. general processing enterprises and low value-added manufacturing enterprises do not have competitive advantages, especially those who used to take care of regional preferential policies. They should adjust their industrial direction as soon as possible, and adapt to the adjustment of national tax policies through restructuring or technological pformation.

3., after the reform, the tax system is standardized and the management is stricter. Enterprises must strengthen internal management, calculate carefully, make full use of the rights granted by the tax law, protect the legitimate rights and interests, and pay taxes according to the regulations, and change the phenomenon of tax evasion and tax evasion in the past.

4., the tax law has given enterprises a lower standard of payment, lower tax rates, and changes in preferential policies. This has increased the difficulty of tax authorities' collection and management. The scientific setting of tax system requires tax officials to continuously improve and innovate the means of collection and management, and levy management techniques, so as to adapt to the changes brought about by the reform.

Therefore, after the unification of corporate income tax, improving the quality of tax cadres and mastering modern means of collection and management will become the main theme of internal construction of tax authorities.