Value Added Tax Business Tax Increase Significantly

In October 31st, the Ministry of Finance issued two new regulations concerning "taxes". The first is the implementation rules for the Provisional Regulations on resource taxes, which raise the tax burden of crude oil and natural gas. Two, the threshold for value-added tax and business tax has been raised substantially.

The two are implemented today.

From the possibility of a nationwide tax on property tax to the environmental tax being discussed, to the reform of resource tax and the expansion of value-added tax, the pace of tax reform in China has been accelerating in the near future.

About a week ago, Premier Wen Jiabao of the State Council also stressed the need to vigorously promote structural tax cuts when he proposed that macro policies should be properly adjusted in a timely manner.

A journalist interviewed by the finance and taxation industry said that the increase of resource tax and the relaxation of value added tax and business tax were in line with the general direction of structural adjustment, which has far-reaching significance for promoting China's economic development to be more reasonable.

Raising the threshold of two taxes

The Ministry of Finance and the State Administration of Taxation yesterday amended some of the provisions of the detailed rules for the implementation of the Interim Regulations of the People's Republic of China on value-added tax and the detailed rules for the implementation of the Interim Regulations of the People's Republic of China on business tax.

The revision is mainly focused on the adjustment of the two tax points.

After the revision, the scope of the three types of VAT threshold has been raised. The value of the vat of the sale of goods has been adjusted to 5000~20000 yuan for the monthly sales amount, while the previous sales amount is 2000~5000 yuan. The sales tax service for the taxable services has been adjusted to a monthly sales 5000~20000 of RMB yuan, after which the monthly sales amount is RMB 1500~3000 yuan, and the monthly sales tax is increased to 300~500 yuan per time (day) sales, after which the sales volume of each time (day) is 150~200 yuan.

In terms of business tax,

Zhang Bin, director of the Tax Research Office of the finance and Trade Institute of the Academy of Social Sciences, told reporters that after the adjustment of the range of levy points, the provinces will determine the tax rate within the scope of their own economic development level, and then report it to the Ministry of Finance and the general Administration of Taxation for the record.

Generally speaking, the starting points in economically backward areas will be lower, and the economically developed areas will be relatively higher.

Zhang Bin believes that due to this relatively large adjustment, all provinces and municipalities will make corresponding adjustments, and a large number of enterprises and individual businesses will be able to bid farewell to the value-added tax and business tax.

Lightening the burden for small and micro enterprises

Not long ago, the State Council promulgated 9 policies and measures to support small and micro enterprise development. In addition to financing, it also proposed raising the threshold of value-added tax and business tax for small and micro enterprises.

Last weekend, when the State Council executive meeting deployed economic work, Premier Wen Jiabao once again pointed out that he actively supported the development of small and micro enterprises, especially those who absorbed employment and technological innovation.

All regions and departments should pay close attention to the implementation of the financial and taxation policies that have been promulgated, and further increase support to help enterprises solve practical difficulties.

The Ministry of Finance said the move was aimed at implementing the State Council's request to support the development of small and micro enterprises.

Zhang Bin said that the increase in the threshold was still very large, and the care group was relatively clear, mainly for individual businesses and small and micro enterprises.

Li Zibin, President of the association of Chinese small and medium enterprises, called on many occasions that the high tax burden of enterprises is an important factor that makes SMEs stagnant.

In addition to 17% value-added tax and 25% enterprise income tax, enterprises need to pay urban construction tax, education tax addition, local education development fee, price adjustment fund, levee fee, property tax, land tax, stamp duty, housing rental tax, trade union funds, disabled persons fund, plus all kinds of fees and fines, the actual tax burden of enterprises has exceeded 30%.

"With the increase of the value added tax and business tax threshold, the additional taxes such as urban construction tax will also be reduced accordingly," Zhang Bin said.

Finance and taxation expert Li Wenhai also told reporters that for small and medium enterprises to reduce blood taxes, tax burden can be part of the burden of enterprises, financing is to help SMEs solve the problem of capital chain.

Over the past month, fiscal and tax policies have played a significant role in supporting SMEs, not only in tax cuts but also in the use of financial institutions to small and micro enterprises.

When it comes to the impact on the national revenue, Zhang Bin thinks that although the value-added tax and business tax are the main taxes in China, the proportion of individual businesses and small and micro enterprises is not large, which will not cause a substantial impact on China's fiscal revenue.

Provisional oil and gas resources tax rate 5%

In addition to the increase in the value added tax and business tax threshold, the Ministry of Finance yesterday announced the implementation details of the Provisional Regulations on resource tax, and the provisional regulations will be formally implemented today.

The revision of the Provisional Regulations on resource tax is mainly based on the increase of the resource tax collection method of the ad valorem rate. The tax on crude oil and natural gas resources is changed from the quantity assessment to the ad valorem levy, and the tax level of crude oil and natural gas is set to be 5%~10%.

In addition to crude oil and natural gas, other minerals are still being calculated according to the quantity. The regulations amended the coking coal and rare earth mines separately in the coal resources and the non-ferrous metal ore resources.

From the provisional regulations promulgated on the 31 day, coking coal resources tax will be collected at 8 yuan per ton. The amount of tax on rare earth resources tax is: light rare earth, including fluorocarbon ore, monazite mine, 60 yuan / ton, medium and heavy rare earth, including phosphorus yttrium ore, ionic rare earth ore, 30 yuan / ton.

Lin Boqiang, director of the energy economics research center of Xiamen University, told reporters that the resource tax for coal is still low. This adjustment is mainly aimed at oil and gas because the price of oil and gas is mainly linked to international linkage, and the adjustment of coal resources tax will soon be pmitted to the consumer sector.

Lin Boqiang said that the problem of resource tax reform must be: improving energy efficiency and reducing social burdens is often a policy choice of dilemma. For the government, the key is the balance between efficiency and equity. If the purpose of resource tax reform is clear and the design is relatively reasonable, many problems and defects can be solved and perfected in the practice after the launch.

He believes that the current resource tax reform is not over yet. The direction of the next reform may be coal and rare earth elements, and it is likely to be changed from volume assessment to ad valorem.