Tax Reduction: "Straw Saving" For Small And Medium Sized Textile And Garment Enterprises

At the national finance conference held in December 25, 2011, Xie Xuren, Minister of finance, said that 2012 will continue to implement various policies to increase the tax burden on small and micro enterprises, such as raising the value added tax and business tax threshold.

The news of continued tax cuts has undoubtedly lifted the number of small businesses in the "ready winter" state.

In the past 2011, for the traditional textile and garment industry, it encountered many difficulties, such as insufficient orders, rising costs and heavy tax burden.

Jeopardize the industry's "heavy"

Zhang Jie is chairman of the China Hi-Tech Group Corporation. His company achieved sales of 30 billion yuan in 2011, but only 500 million yuan was tax on textiles, which did not include taxes on exports or trade.

"In 2011, the corporate value-added tax rate was 17%, the tariff rate was 6%, and all taxes added up to a tax rate of 30%. Excluding tax revenue, the annual profit is only 3%~5%."

Zhang Jie said.

According to Zhang Jie's calculation, all the taxes paid by enterprises in 2010 have accounted for about 5% of the total sales, and the income is equivalent to 2 months' sales.

Serious tax burden makes enterprises "overburdened".

Zhang Jie said that although the state has relaxed the export tax and tariff collection methods since 2010, the current value-added tax and business tax are

The National Federation of industry and Commerce in 17 provinces and cities of a small and medium-sized enterprises in the first half of 2010, domestic research shows that

During the course of the interview, many entrepreneurs also said that compared with China's large scale and standardized management enterprises, the small and medium-sized enterprises with poor risk tolerance have obviously come to a time of difficulty. If the overall environment continues to deteriorate, industry reshuffle is bound to come.

Hu Xianguang, the head of Hangzhou Ding Mao Textile Co., Ltd. calculated a book to reporters: in 2011,

But Hu Xianguang also said that the pressure in 2011 was mainly due to the tax paid. In the 8 million yuan expenditure project, the expenses of staff wages, raw materials upgrading, equipment renewal, business training and other expenses were almost half of the total tax paid. The original enterprise had to increase the automatic water line equipment in 2011, but now it can only drag the plan back.

"Since 2011, the international cotton price is on the rise channel. With the export of cotton exporting countries such as India to suspend cotton exports, the domestic cotton prices will also be difficult to fall in the short term. Under such circumstances, the cost of raw material procurement will not be significantly improved in the short term. As a business sector, it can only increase profits through other ways."

China Textile Industry Association Zhang Yongxin thinks.

According to the data, the textile industry, which is an important pillar of China's economy, accounts for 1/5 of the total amount of foreign exchange earning in China's exports, and more than about 20000000 of the employment population in the whole industry.

"In the future, the implementation of structural tax reductions will be accompanied by an increase in the value added tax and business tax threshold. According to the State Administration of Taxation, the burden of corporate income tax will be reduced by 40% on average after the series of tax cuts," said Liu Zuo, a researcher at the National Institute of taxation.

Value added tax expands

In addition to the textile industry, Liu Huan, vice president of the tax School of Central University of Finance and Economics, believes that the production of service industries, cultural and creative industries and certification services will be the beneficiaries of the tax reform.

It is understood that during the "12th Five-Year" period, China will expand the scope of value-added tax collection, and reduce tax on business tax, so as to "improve the tax policy conducive to upgrading the industrial structure and the development of the service industry".

From January 1, 2012, China will launch a pilot scheme of value-added tax on business tax in Shanghai's pportation industry and some modern service industries.

The expansion of value added tax and the reduction of business tax are also regarded as an important part of structural tax cuts.

For a long time, the scope of value-added tax reform has not covered the pportation industry and the logistics industry. After the implementation of the new tax system, the logistics industry will pay 6% of the value-added tax.

Xie Xuren, Minister of finance, also said that the implementation of the business tax reform VAT reform in some producer services is an important measure for China to improve its value-added tax system.

He stressed that China will gradually solve the problem of uncoordinated taxation of goods and services from the system, and will steadily expand the scope of the business tax to replace VAT, and promote the development of the service industry, especially the modern service industry.

In this regard, Zhang Jie said: "clothing is a creative industry, we do clothing Creative Industry Park, the construction of new consumption formats, enhance people's consumption values and levels, this is in the traditional business innovation."

Statistics show that by 2020, the proportion of cultural and creative industries will account for 8%~10% of GDP, and the implementation of fiscal reform in this industry will strongly promote the development of the industry.

"Forensic service industry is also an intermediary, and it will also be an industry of tax and fee reform in the future." President Liu Huan said he believed that many departments needed to produce consulting fees through intermediaries. However, these institutions did not have unified tax management. If unified tax collection was applied in accordance with the value added tax, the tax rate was very high. According to the business tax, some agencies had no special invoice for business tax and could not be deducted later, so after the value added tax reform, the departments that used these services would get great benefits.

"Although structural tax cuts will cause some industries to fluctuate and adjust in the short term, in the long run, the whole industrial structure and economic structure will form a positive interaction, because the characteristics of turnover tax are in the whole process of production to sales, and the repeated expropriation caused by the process will be very stressful to enterprises. So after the tax reduction is not affected by the whole economic operation, enterprises will have more autonomy and will play a positive role in the overall economic environment."

Zhou Jianbo, associate professor of economics at Peking University, thinks.