There were many highlights in large-scale VAT tax rebates

2022-05-06 0 By

A state Council executive meeting on March 21 confirmed the implementation of a large-scale VAT tax rebate policy, and relevant departments have officially started the work.Large-scale tax left for tax rebates, is the key to stable macroeconomic market this year, is conducive to the complex environment of economic operation to the current injection, boost market confidence, and strong will to win, for the best “six stability” six bao “, “China’s economic operation within a reasonable range to build a good policy environment.The so-called VAT final retained tax credit refers to the input tax that is not fully deducted by taxpayers, mainly due to the inconsistency between the input tax and output tax of taxpayers in time.Since 2018, China has successively launched the reform of VAT retention against tax refund.This year, in the face of a more complex and grim and uncertain international environment, in order to cope with the new downward pressure on the domestic economy, the implementation of VAT retention tax rebate has been further intensified, which is unprecedented.Throughout the policy points, there are mainly the following aspects of the bright spot.Policy intensity exceeded expectations.China will set aside 1.5 trillion yuan in VAT rebates this year, more than the total amount of tax cuts and fees in any single year since 2015.And if the policy implementation is effective, it can be further increased.Policy coverage is huge.This year, China extended the VAT rebate policy from advanced manufacturing to all manufacturing industries.Expanding the number of industries from manufacturing to five, including scientific research and technology services;From large and medium-sized enterprises to small and micro businesses and individual businesses in all industries.The sheer size of the coverage gives the policy a clear blanket benefit, benefiting businesses of all sizes and natures.Priority will be given to small and micro businesses and individual businesses.This year, the VAT rebate policy will give priority to small and micro businesses and individual businesses, involving hundreds of billions of yuan of tax rebates, which is expected to be launched in early April.At present, out of China’s more than 150 million market entities, there are more than 140 million small and micro businesses and individual businesses, which are very large in number and widely distributed. They affect the livelihood and rice bowl of the people and are directly related to people’s livelihood and employment.Giving priority to small and micro businesses and individual businesses in VAT retention, tax rebate, demonstrates the Party and the government’s original intention to do their utmost to protect small, micro and individual businesses and do everything possible to stabilize the basic livelihood of the people.Give priority to the real economy.This year, the VAT rebate policy was expanded from manufacturing to cover scientific research and technology services, electricity, heat, gas and water production and supply, software and information technology services, ecological protection and environmental management, transportation, storage and postal services.These major industries are the real economy and are important pillars and backbone enterprises in China’s economic structure and industrial system.The large-scale VAT retention, tax rebate, and tax refund for enterprises are based on a large base, large amount of money, and targeted. This will greatly ease the pressure on cash flow of enterprises and help them better cope with changes in the economic environment.The central government finances are “gelievable”.This year, the central government has set up three special funds to increase transfer payments to local governments and ensure the implementation of the policy.Taking into account local governments’ financial resources and budgetary arrangements, the central government voluntarily covered most of the funds needed for tax and fee cuts.In addition to assuming 750 billion yuan of tax rebate funds at the same level, the central government will also bear 82% of the local government’s share, which will effectively ease the financial pressure of local governments and offset the reduction in local fiscal revenue caused by the tax rebate policy, creating favorable conditions for ensuring the implementation of the tax rebate policy.To deepen the VAT reform to create a new starting point.This year, through the implementation of large-scale VAT retention tax rebate policy, all eligible small and micro enterprises, as well as manufacturing and other six industries of the increment and stock retention tax rebate problem will be completely solved, so as to get rid of a major historical burden that restricts the optimized development of China’s VAT system, for the next step of deepening reform,Building a more modern and reasonable VAT system creates a new starting point.In the future, China will further deepen the reform of VAT system, promote the current multilevel tax rate to the international convention of “one level standard tax rate + one level preferential tax rate”, so as to completely solve the problem of withholding tax rebate in the system.(Feng Qiaobin is deputy head of the Macroeconomic Research Department at the Development Research Center of The State Council.)