Wenzhou Intends To Introduce Tax Cuts To Save Smes

Wenzhou is going to introduce a package of measures to prevent the chain breaking of SMEs.

"Two days after the end of the National Day holiday, the provincial and municipal convening meetings have not been stopped and will be opened tomorrow.

They are all studying and formulating a package of rescue measures to help SMEs get through this financial crisis.

Zhou Dewen, President of Wenzhou SME Development Promotion Association, said yesterday after attending a meeting of the Wenzhou municipal government.

According to the briefing, Wenzhou's proposed package includes new loans and temporary tax relief for SMEs.

It is worth mentioning that, according to the Hongkong Wen Wei Po quoted Wenzhou financial affairs office as saying, the Wenzhou municipal government actually submitted an application to the Zhejiang provincial government at the end of September, asking the Zhejiang provincial government to apply to the people's Bank of China (central bank).

"Studying tax reduction and reduction measures"

Zhou Dewen told reporters 9 days ago that the relevant officials of the IRS in Zhejiang province met with him yesterday to discuss the draft policy on tax reduction and burden reduction for SMEs, including short-term and long-term tax reform.

"The reform is still in place.

Zhou Dewen said that the reform of tax reduction and burden reduction policy for small and medium-sized enterprises is a major project, and for the predicament faced by Wenzhou enterprises, "a specific bill can be introduced to make a temporary tax policy for enterprises in a certain region."

He also suggested that for a small enterprise under 10 people, it has made contributions to social employment and should be duty-free.

A former central bank official told reporters in an interview with the Morning Post reporter that according to his understanding, the current situation of Wenzhou usury has invested billions of dollars into the market, first revitalize the stagnant entity economy, and then assist a series of measures, so that enterprises will not be under such heavy pressure.

It is understood that Wenzhou has now deployed banks in accordance with the principle of "territorial management, one enterprise and one strategy" to solve problems for SMEs.

Wenzhou branches of various banks have already expressed their support for small and medium enterprises' credit, and the interest rate of the Wenzhou branch of the CCB has been reduced to 10% on the current basis.

According to the local media in Wenzhou last night, Meng Jianxin, executive vice mayor of Wenzhou, believes that the main task of the current government is to strengthen the regulation, supervision and service of microfinance, private lending and other aspects, so as to ensure Wenzhou's financial stability and development.

$60 billion for usury?

It is worth mentioning that on the 9 day, there is also information that the Wenzhou municipal government submitted a request for assistance to Zhejiang provincial government at the end of September, entitled "request for financial stability reloan".

The loan is 60 billion yuan in size and applied for one year. It is designed to support the increase of the financing scale of Wenzhou's banking institutions and the maintenance of local financial stability.

Regarding this, the Wenzhou municipal department concerned contacted by the Morning Post reporter did not respond to the above documents.

According to the official website of the central bank on the Interim Measures of the people's Bank of China on emergency loan management, the central bank can really issue emergency loans under emergency situations, including the "city commercial banks approved by the head office, the urban credit cooperatives, the commercial banks outside the rural credit cooperatives and other non banking financial institutions".

On the above news, Zhou Dewen's response is: "60 billion yuan is not enough", "even 100 billion yuan will not necessarily solve the present problem."

Zhou Dewen told reporters, how many bad loans private lending, how many owners can not run statistics.

"Those enterprises that have problems in their assets will not declare the true financial situation to the association or the government, otherwise the creditors will rush to the enterprise for a run."

According to the monitoring of the Wenzhou Municipal Commission of letters, the scale of private lending in Wenzhou is about 120 billion yuan.

According to Ye Xiaoxi, vice president of Wenzhou small and Medium Enterprises Development Promotion Association, it is estimated that the usurious loan funds that have already been running are sure to exceed 10 billion yuan, but under 50 billion yuan.

Zhou Dewen said he personally believed that the central bank would support lending to Wenzhou for financial stability.

According to the foregoing reports, the issuance and management of reloans, the lending banks and the repayment responsibilities are organized and implemented by the branches of the local people's Bank under the guidance of the head office.

But the market also has doubts.

"60 billion yuan?

This is obviously too much. "

The former central bank official said.

He said that the premise of the central bank's refinancing of financial stability is to determine the financial position of the target investors, which has jeopardized the stability and security of the big financial system.

"Most of the usurious loans that Wenzhou is facing now are private lending, and the proportion of loans directly from commercial banks is not high."

Therefore, "the current situation in Wenzhou is not enough to pose a threat to the stability of the financial system".

In an interview with reporters, several economic circles raised the question of how many bad loans are involved in the current usury collapse situation in Wenzhou. How much of the principal and interest are there?

And how many of them are able to survive through the revitalize the capital chain, and how many companies are already insolvent, all need to have a clear disclosure.

"Now there is not only one Wenzhou area where the small enterprises guarantee breach of contract and the capital chain breaks up." this year, you have 60 billion yuan in Wenzhou, and tomorrow you come to Henan to get 100 billion yuan. Why should the government pay you?

"The key is that if we calculate the monetary multiplier based on the current 5 times, the refinancing of 60 billion yuan is equivalent to adding 300 billion yuan to the market."

The former central bank officials are not worried.

To fill the problem of capital disruption in the state-owned financial system, the central bank has issued a precedent for refinancing loans to several banks and securities companies.