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VAT Reform in Jiaxing Strengthens Tax Reduction Effect

Release date:2019-08-23 11:23

“The reform on taxes and fees reduction has brought real benefit to our enterprise.” said an accountant from an enterprise of Pinghu, a county-level city of Jiaxing, when making a tax declaration for the company. According to this accountant, his enterprise issued 10 VAT invoices with a tax rate of 13% last month, 70,000 yuan was saved compared with the past tax rate of 16%.

Since the beginning of the year, a series of favorable policies on taxes reduction have been made in China, benefiting taxers a lot. The VAT reform is one of the most important ones. What had happened to enterprises after those favorable polices were implemented? Have the tax reform brought real benefits to enterprises? Recently, the reporter has made interviews with enterprises and found that an increasing number of enterprises had become the beneficiaries of the tax reform just like the enterprise mentioned above.

Enterprises are direct beneficiaries of taxes and fees reduction. “The falling of the tax rate this time injected strong impetus into our development.” said Xu Xiaofang, the accountant of Jiaxing Jiahe Electricity Equipment Co., Ltd. This company is engaged in the production and sales of exothemic welding powders, moulds, cable holders, electric power equipment, etc. In the first month when the favorable policies were implemented, its sales value amounted to 2.69 million yuan and the tax payable was 350,000 yuan, 80,000 yuan was reduced compared with the months before the favorable policies were issued. 

“The taxes and fees reduction was greater than ever this time to lighten the burdens of market entities and strengthen enterprises’ development potentials and endogenous power. Tax is reduced, so enterprises are able to invest more in production and technology R&D and intensify their competitiveness, and the taxes and fees reduction injected new driving forces into enterprises’ development. ” said an official from Jiaxing Tax Bureau.

This time the tax rate for the construction industry is reduced to 9% from previous 10%. Although it is just one percentage point lower, it is remarkably significant for enterprises. According to a financial personnel from a company engaged in industrial park construction, over 200,000 yuan will be saved if its sales value keeps the same with that of last year, which means this enterprise reduces its costs, and more money can be used to renew equipment and strengthen competitive power.

Actually, the tax is finally burdened by consumers. The reduction of the tax rate indicates the decline of the prices of consumer goods and services, which will further stimulate consumption. In retail industry, the price adjustment due to tax reduction of upstream enterprises will be transferred to the retail industry, and products’ prices will go down to different degrees. The tax reduction also leads to the decline of enterprises’ procurement cost and rent, and finally benefits consumers.    

In addition, all tax offices of Jiaxing dispatch their experts to publicize favorable policies to serve enterprises, people and grassroots units to benefit them. Overall services are provided to ensure the implementation of tax reduction policies by means of assigning specific responsibilities to specific persons.



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