This year, Chinas 2 trillion yuan tax reduction and fee reduction policy dividend is speeding up the release. The data obtained by journalists from authoritative departments show that tax cuts and fee cuts have achieved remarkable results in improving the capital of listed companies. In the first half of the year, the proportion of tax expenditure in business income of listed companies was 6.81%, which decreased by more than 20% year on year. Tax cuts and fee cuts have helped entity listed companies reduce their expenditures by about 330 billion yuan, significantly improving the cash flow of business activities. The survey shows that 80% of listed companies believe that tax reduction is one of the best policies to support the development of enterprises. Experts estimate that the VAT tax rate will decrease and the earnings of A-share listed companies will increase by about 350 billion yuan in the whole year.
The reduction of expenditure of about 330 billion yuan in the first half of the year is an intuitive effect of tax reduction and fee reduction. Pangu think tank senior researcher Pan He-lin told Securities Daily that, compared with special subsidies and other preferential policies, tax reduction and fee reduction are more inclusive and direct, which can directly reduce the burden of enterprises, significantly improve the cash flow operation of enterprises, and inject new light and simple for the development of listed enterprises. Vitality.
Pan He Lin believes that for A-share listed companies, tax cuts and fee cuts not only reduce the operating costs of enterprises, but also release great benefits to the market, which will play a positive role in improving the performance of listed companies and stock prices. The direct significance of tax reduction and fee reduction is that it can directly reduce the current tax burden of enterprises, stimulate the motive force of business development, improve the self-use retention ratio of surplus cash, further reduce the cost of refinancing, and provide more growth space for enterprises.
Tax Reduction and Fee Reduction for Listed Companies
Enhanced sense of acquisition
Recently, several listed companies in different industries interviewed by reporters have admitted that deepening the reform of value-added tax, R&D fees plus deductions and other effective implementation of tax reduction and fee reduction policies, so that they deeply feel the solid tax reduction dividend. Many companies have increased the pace of technological transformation, new product research and development, and key core technology tackling.
Behind the technological innovation and breakthroughs, there is a strong impetus from preferential tax policies. Chen Hongling, chairman of Baolong Science and Technology, told Securities Daily that in the first half of this year, the proportion of R&D fee plus deduction increased from 50% to 75%, which directly saved the companys income tax by nearly 700,000 yuan; the value-added tax rate dropped from 16% to 13%, which reduced the companys value-added tax by nearly 60,000 yuan; and the preferential reduction of property tax and urban land use tax. The new tax reform policy and the social security premium reduction rate made the company save more than 900,000 yuan and 210,000 yuan respectively. A number of tax reduction and fee reduction policies were superimposed and enjoyed. The company saved more than 2 million yuan in total.
The sustained release of tax break dividends has accelerated the pace of Paulon technology towards the world. In 2019, Paulon Technology acquired Austrian MMS equipment business to further enhance the level of automation and intelligent manufacturing equipment, and contribute to Chinas manufacturing catch up with the international level.
We have been supplying bottom embryo and lining for LV raw material suppliers for nearly ten years. This decade has witnessed the rapid development of Huafeng Ultra-Fiber and the comprehensive, accurate and sustained development of the countrys good policies. Cai Kaicheng, Chief Financial Officer of Huafeng Chaofan, told Securities Daily, According to preliminary estimates, the VAT tax rate in this round has dropped from 16% to 13%, bringing us more than 2 million yuan of tax reduction dividends.
According to Cai Kaicheng, with the deepening of supply-side reform of manufacturing industry and the overall deepening of industrial restructuring, it is the only way for Huafeng Super-Fiber to transform and upgrade to information, data and specialization.
The unprecedented tax reduction and fee reduction policy demonstrates the Party Central Committee and the State Councils reform determination to create a better business environment for enterprises. As an old-brand manufacturing listed company, Shangchai Stock Company has effectively lightened the burden of enterprises by introducing tax reduction and fee reduction measures, and promoted the transformation and upgrading of enterprises from traditional manufacturing to intelligent manufacturing. In the view of Sun Jie, the finance minister of the company, tax reduction and fee reduction are like a reassuring pill: Value-added tax has been reduced from 16% to 13%. The range of real estate tax reduction and the reduction of urban land use tax have helped enterprises save nearly 3 million yuan in the first half of the year. We will have more money to invest in building intelligent production lines, towards the industrial Internet.
Experts believe that these tax reduction figures for listed companies show that tax reduction and fee reduction not only give enterprises and employees a real sense of gain, but also bring long-term benefits to enterprises.
Tax burden of different industries
All of them have been alleviated.
It is noteworthy that the SFC data show that the tax burden of all 28 major industries has been reduced, including chemical industry and construction materials industry tax burden decreased by 2.25 and 1.87 percentage points respectively.
In our follow-up report data, except for a few industries such as real estate, the tax burden of most industries has decreased to varying degrees. Xie Chao, chief analyst of Everbright Securities Strategy, told Securities Daily in an interview that petroleum and petrochemical industry had declined by 2.3 percentage points, coal by 2 percentage points and building materials by 1.8 percentage points, as well as food and beverage, steel, medicine, light industry manufacturing, basic chemical industry and non-ferrous metals. The tax burden fell by more than one percentage point. This may be due to the fact that in the adjustment of VAT tax rate in April, the manufacturing tax rate, which used 16% tax rate, was reduced by 3% to 13% for most industries, and by 1% to 9% for those industries which used 10% tax rate for transportation, construction and basic telecommunications.
Pan He-lin believes that the reduction of tax burden in different industries is the implementation effect of both inclusive tax reduction and structural tax reduction. For example, the chemical industry is mainly engaged in the production and development of chemical industry, mainly in manufacturing industry, involving more abundant tax reduction projects. As a major polluter, the equipment and technology of chemical industry also have great room for improvement in energy saving and environmental protection, and have more opportunities to enjoy tax incentives of R&D costs, energy saving and environmental protection. As a typical representative industry of manufacturing industry, the reduction of tax burden in chemical industry coincides with the policy starting point of reducing tax burden in manufacturing industry.
Tax reduction and fee reduction
Increase company profit
Tax reduction and fee reduction are conducive to the improvement of profit margin of listed companies. According to Xie Chaos data to reporters, in the first half of 2019, the gross profit rate of entity listed companies was 19.40%, 0.05 percentage points higher than that of the first quarter, 6.05% higher than that of the first quarter, and 0.21 percentage points higher than that of the first quarter. Income tax rates also fell by 0.32 percentage points to 21.16% from 21.48% in the first quarter. If we only consider the impact of VAT reduction, theoretically, VAT is not a cost and will not directly affect the companys profit statement. However, enterprises have actually paid less tax burden, which may reflect the improvement of cash flow statement. In the first half of 2019, the net cash flow generated by non-financial business activities in the whole A accounted for 3.97% of operating income (TTM), up 0.31 percentage points from 3.66% in the first quarter. The improvement of small and medium-sized enterprises was greater. The net cash flow generated by small and medium-sized board business activities accounted for 4.61% of operating income (TTM), up 0.83 percentage points. Point, GEM 3.39%, up 1.42 percentage points. This may reflect the impact of tax cuts and fee cuts.
Looking forward to the whole year, how much profit will tax cuts and fee cuts bring to A-share listed companies? Xie Chao said that using the industrys expected prosperity index to match the bargaining power of various industries, calculating the impact of the decline in VAT tax rate on the earnings of A-share listed companies, it is expected to increase the earnings of enterprises by about 350 billion yuan in the whole year. Household appliances, catering tourism and other industries with strong bargaining power will benefit more from it.
Pan Helin said that compared with the target of 2 trillion yuan tax reduction and fee reduction, tax reduction and fee reduction in the first half of the year helped entity listed companies reduce about 330 billion yuan, and there is still room for further implementation. Under the pressure of economic downturn, tax reduction and fee reduction can effectively reduce the burden of tax and fee, and reduce the operating cost of enterprises. With the full release of policy dividends, A-share listed companies will further improve their profitability, strengthen risk resistance, enhance their market competitiveness and development resilience with the help of the direct reduction of operating costs.
Tax Reduction Red Pack
Keep on going
Since this year, the state has issued a series of tax cuts and fee reductions red envelopes to activate the new momentum of market players by the tax reduction law, and continue to implement tax cuts in depth, especially to surprise the manufacturing industry.
On September 4, the Ministry of Finance and the General Administration of Taxation issued a bulletin that for some advanced manufacturing taxpayers, the application conditions for incremental retention tax rebate were further relaxed, which was no longer subject to six consecutive months of conformity with the standards, and the requirement of proportional refund was cancelled.
Li Jun, managing partner of PricewaterhouseCoopersindirect tax services in mainland China and Hong Kong, told the Securities Daily that this reflected the growing support for advanced manufacturing industries at the national level. Faster and more efficient tax rebates would promote related industries to improve cash flow, expand production and investment scale and overall economic development. It will play a positive role.
The preferential policy only applies to some advanced manufacturing industries, including taxpayers who produce and sell non-metallic mineral products, general equipment, special equipment and computers, communications and other electronic equipment, accounting for more than 50% of total sales.
Li Jun believes that although the proportion of preferential industries in manufacturing industry is limited, because the related industries belong to the upstream industry of manufacturing industry, relaxing the tax rebate restrictions on these industries will help enterprises improve cash flow, reduce costs and expand investment, thereby increasing equipment supply for general manufacturing industry, which will be beneficial as a whole. Development of manufacturing industry.
Source: Liable Editor of Securities Daily: Yang Qian_NF4425