In order to eliminate double taxation, a pilot project of changing business tax into value-added tax (hereinafter referred to as "VAT reform") was launched in 20 12, and the business tax was abolished in 20 16. Since then, the value-added tax reform has been further deepened, including the degeneracy of the tax rate, especially the large-scale value-added tax rebate exceeding 2 trillion yuan this year, which is undoubtedly a highlight of the value-added tax reform in the past decade.
A number of finance and taxation experts told CBN that in the past ten years, the VAT reform has obviously reduced the burden on market entities such as enterprises, stimulated market vitality, thus promoting the smooth operation of the economy and basically establishing a modern VAT system. VAT legislation has also begun. In the future, the value-added tax reform will be further deepened, the three-grade value-added tax rate is expected to be further simplified into two grades, the value-added tax deduction chain will be further improved, the value-added tax rebate reform still needs to be further promoted, and the value-added tax rebate system needs to be improved. In addition, it is necessary to balance the relationship between VAT reform and legislation in order to stabilize the expectations of market participants and further promote the establishment of a modern VAT system.
Reduce the burden and improve the tax system simultaneously
Value-added tax (VAT) is a turnover tax based on the value-added of goods (including taxable services) in circulation, and it is the largest tax in China at present.
According to the data of the Ministry of Finance, the domestic value-added tax revenue increased from about one trillion yuan in 20 12 to one trillion yuan in 20021year, accounting for nearly 37% of the total tax revenue. Behind the steady growth of value-added tax revenue scale, it is directly related to the steady growth of China's economy in the past decade, and is also closely related to the value-added tax reform in the past decade. In the initial stage of VAT reform, the reform of VAT system was the main one.
Li, a professor at Beijing National Accounting Institute, told CBN that from 2065438+2002 10, China launched a pilot program of increasing the business value of the Shanghai transportation industry and some modern service industries. Since then, the scope of the pilot has been continuously expanded. Until May 20 16, China launched the pilot program of camp reform. This reform has eliminated the problem of double taxation caused by long-term collection of value-added tax and business tax on goods and services, and established a sound and scientific turnover tax system.
"The reform of the camp has effectively solved the problems of repeated taxation and the interruption of the VAT deduction chain brought about by the business tax system, created a more neutral tax environment, and is conducive to stimulating market vitality. It is an important strategic measure for China to carry out supply-side structural reform." Li Jun, managing partner of PwC China's industry development and tax strategy, told CBN.
Li introduced that after the full implementation of the camp reform, in July 2007, the VAT rate was reformed. After several reforms, the fourth value-added tax rate was finally reduced to the third (13%, 9%, 6%). In addition, China's large-scale tax reduction and fee reduction policy has also promoted the deepening of VAT reform. In 20 19, the tax refund system was formally established, especially in 2022, which was a major breakthrough in China's tax refund system.
According to the data of State Taxation Administration of The People's Republic of China, as of September 20th this year, the value-added tax rebate amounted to 2.2110.30 billion yuan. The implementation of the large-scale VAT refund policy has eased the financial pressure of enterprises and promoted the stable operation of the economy.
Li Jun believes that since 20 17, the main line of VAT reform has been around VAT tax reduction, which has played an important role in increasing the proportion of direct taxes and reducing the comprehensive tax burden of enterprises. While the tax rate is decreasing, China is constantly exploring and improving the VAT input tax rebate system. Relevant measures show that China's tax refund policy is gradually in line with international standards and developing towards the normalization of tax refund.
Many enterprises have actually felt the effect of VAT tax reduction. Talking about the ten-year reform of value-added tax, Zhang Feng, financial director of Wuhan Guhe Automobile System Co., Ltd. said: "The value-added tax rate is getting lower and lower, and there are more and more preferential policies, which makes it more and more convenient to handle business."
Tian Zhiwei, deputy dean of the Institute of Public Policy and Governance of Shanghai University of Finance and Economics, told CBN that the VAT reform in the past decade has embodied three main lines. The first is to make the VAT system more suitable for economic development. For example, the reform of the camp is to eliminate double taxation and promote the development of the service industry. Secondly, China's tax structure has been optimized, and the reform of value-added tax reduction is actually in line with the general direction of reducing the proportion of indirect taxes and increasing the proportion of direct taxes. Third, optimize the value-added tax system and establish a modern value-added tax system.
Experts interviewed generally believe that the VAT reform in the past decade has lightened the burden on enterprises, increased their cash flow, helped enterprises tide over the difficulties, stimulated market vitality, promoted economic growth, optimized the tax structure, and basically established a modern VAT system in China.
The focus of the next reform
Great progress has been made in the reform of value-added tax in the past decade, but it will continue in the future.
Li said that in recent years, China has continuously deepened the reform of value-added tax and achieved remarkable results, making value-added tax play an important role in safeguarding fiscal revenue and maintaining tax neutrality. The goal of value-added tax reform in China during the 14th Five-Year Plan period is to improve the modern value-added tax system. Therefore, we should further deepen the reform of value-added tax in China, while ensuring fiscal revenue, adhere to the orientation of maintaining value-added tax neutrality and promoting economic growth, and promote the establishment of a modern value-added tax system.
It is the general trend to further simplify the VAT rate. Previously, the State Council made it clear that the degenerate direction of VAT rate was three grades and two grades.
Li believes that China has a three-tier VAT rate and a "zero tax rate" policy. In the case of multi-level tax rate, it is easy to see that the input tax rate is lower than the output tax rate, which leads to a large number of tax credits for enterprises, which affects the resource allocation of enterprises, and it is difficult to effectively achieve VAT neutrality and affect the quality of economic growth. At the same time, from the perspective of optimizing the business environment, setting too many tax rates will increase the compliance cost of enterprises. In order to simplify the VAT tax system and maintain the neutrality of VAT, we can consider reducing the current three tax rates to two, including the standard tax rate and the low tax rate, on the basis of drawing lessons from international experience.
Li Jun believes that the degeneracy of VAT rate is an important link to improve the VAT policy and realize the neutrality of VAT tax. He suggested that in the future reform direction of tax reduction and fee reduction, the value-added tax rate should be further reduced, and finally the three tax rates except zero tax rate will be degenerated into two tax rates.
Tian Zhiwei said that in the future, we should continue to optimize the tax rate structure, degenerate the VAT rate, and finally form a one-or two-file VAT rate structure.
Li said that in the future, it is necessary to further improve the VAT deduction system, expand the scope of VAT input tax deduction, make the upstream and downstream deduction chain complete, and promote the effective realization of VAT neutrality.
In recent years, the scope of VAT input tax deduction has been continuously expanded, and real estate and passenger transport have been included one after another. Shi, a professor at China University of Political Science and Law, believes that the reason for the heavy VAT burden of some enterprises is insufficient deduction, and the next step of VAT reform needs to improve the VAT deduction system, as much as reducing the tax rate.
Li Jun believes that there are still problems that cannot be used for production and operation deduction, such as paying loan interest, purchasing residents' catering services and daily services, resulting in repeated taxation and increasing the tax burden of enterprises and final consumers. It is suggested to expand the scope of VAT input deduction in a timely manner and improve the VAT deduction chain.
Perfecting the VAT deduction and tax refund system is also the focus of the next reform.
Li Jian suggested that adjusting the applicable conditions of tax refund is a tax mechanism arrangement to ensure the realization of the principle of value-added tax neutrality, and the next step of value-added tax reform should continue to pay attention to the role of tax refund in maintaining tax neutrality. For newly established enterprises, we can consider relaxing the upper limit of credit rating to M level, and adjust the credit rating in time according to the operating conditions of enterprises to ensure that enterprises that are honest and trustworthy and continue to operate can obtain tax refund qualifications in time and enjoy policy dividends.
Tian Zhiwei said that in the future, it is necessary to further improve the VAT export tax rebate system, unify the VAT export tax rebate rate and VAT tax rate, and do a good job in linking the tax rebate system with the export tax rebate system.
"With the further improvement of the level of collection and management, we can consider implementing a comprehensive zero tax rate policy for service exports, so that export services can participate in international market competition at a price of zero tax burden, thus further promoting the development of China's export-oriented economy. In addition, it is recommended to promote services to enter the special customs supervision area to enjoy the tax rebate policy, reduce the procurement costs of enterprises in the region and improve the competitiveness of enterprises. " Li Jun said.
The VAT legislation has been started, and the draft VAT law has been publicly solicited for comments. The State Council plans to submit it to the National People's Congress Standing Committee (NPCSC) for consideration this year.
Li believes that it is necessary to coordinate the relationship between institutional policies and legal policies in the future. It is suggested that the current effective preferential policies for value-added tax should be transformed into institutional arrangements in time, and the value-added tax policies including tax refund policies should be gradually transformed into institutional provisions for value-added tax, so as to stabilize the expectations of market participants, further strengthen the neutrality of value-added tax and promote the establishment of modern value-added tax system.