03
2019
-
12
How will the reduction of VAT rate affect the steel industry?
Author:
This year's government work report made it clear that the tax burden of enterprises should be further reduced, emphasizing the need to reform and improve value-added tax, adjust the tax rate level in the direction of three and two levels, focus on reducing the tax rate of manufacturing, transportation and other industries, and raise the annual sales standard of small-scale taxpayers.
This year's government work report made it clear that the tax burden of enterprises should be further reduced, emphasizing the need to reform and improve value-added tax, adjust the tax rate level in the direction of three and two levels, focus on reducing the tax rate of manufacturing, transportation and other industries, and raise the annual sales standard of small-scale taxpayers.
On March 28, the executive meeting of the State Council decided that from May 1, the value-added tax rate of manufacturing and other industries would be reduced from 17% to 16%, and the value-added tax rate of transportation, construction, basic telecommunications services and other industries and agricultural products and other goods would be reduced from 11% to 10%. On April 4, the Ministry of Finance and the State Administration of Taxation issued the Notice on the Adjustment of VAT Tax Rate, which stipulated that since May 1, taxpayers engaged in VAT taxable sales or imported goods, and the tax rate was adjusted to 16% and 10% if the original 17% and 11% tax rates were applied. For taxpayers purchasing agricultural products, if the 11% deduction rate was originally applicable, the deduction rate was adjusted to 10%. For agricultural products purchased by taxpayers for production, sales or entrusted processing of goods with a tax rate of 16%, the input tax shall be calculated at a deduction rate of 12%. In addition, the annual sales standard of small-scale industrial and commercial taxpayers has been raised to 5 million yuan, and the input tax that has not been fully deducted by some advanced manufacturing enterprises, modern service enterprises and power grid enterprises within a certain period of time will be refunded.
The steel industry in China will benefit from the reduction of value-added tax rate together with other domestic industries. The author believes that this move is conducive to reducing the tax burden of China's steel enterprises, strengthening the market competitiveness of China's steel products, and promoting the transformation and upgrading of the steel industry. However, the deep-seated contradiction in the value-added tax system of the steel industry has not been fundamentally resolved. It is suggested to further adjust and improve the value-added tax policy of iron ore and scrap steel.
On March 28, the executive meeting of the State Council decided that from May 1, the value-added tax rate of manufacturing and other industries would be reduced from 17% to 16%, and the value-added tax rate of transportation, construction, basic telecommunications services and other industries and agricultural products and other goods would be reduced from 11% to 10%. On April 4, the Ministry of Finance and the State Administration of Taxation issued the Notice on the Adjustment of VAT Tax Rate, which stipulated that since May 1, taxpayers engaged in VAT taxable sales or imported goods, and the tax rate was adjusted to 16% and 10% if the original 17% and 11% tax rates were applied. For taxpayers purchasing agricultural products, if the 11% deduction rate was originally applicable, the deduction rate was adjusted to 10%. For agricultural products purchased by taxpayers for production, sales or entrusted processing of goods with a tax rate of 16%, the input tax shall be calculated at a deduction rate of 12%. In addition, the annual sales standard of small-scale industrial and commercial taxpayers has been raised to 5 million yuan, and the input tax that has not been fully deducted by some advanced manufacturing enterprises, modern service enterprises and power grid enterprises within a certain period of time will be refunded.
The steel industry in China will benefit from the reduction of value-added tax rate together with other domestic industries. The author believes that this move is conducive to reducing the tax burden of China's steel enterprises, strengthening the market competitiveness of China's steel products, and promoting the transformation and upgrading of the steel industry. However, the deep-seated contradiction in the value-added tax system of the steel industry has not been fundamentally resolved. It is suggested to further adjust and improve the value-added tax policy of iron ore and scrap steel.
