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VAT program helps firms pay less tax
By Feng Jianmin |
December 19, 2012, Wednesday
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Print Edition
Print Edition
NEARLY two-thirds of new taxpayers in a value-added tax expansion program have reported reduced or no change in tax payments, but more tax cutting measures are still necessary, the Shanghai Statistics Bureau said yesterday.
The bureau surveyed 128 participants in the program and found 36 percent reported paying more tax while 24.2 percent reported paying more than 30 percent less tax.
"Small businesses were the biggest beneficiaries of the VAT program," the bureau said in a statement. "The replacement of business tax with VAT eliminates duplicated taxation and offers timely help for companies in difficult economic times."
It said 71 percent of respondents are "very satisfied" or "relatively satisfied" with the program, and some policy uncertainties have been resolved.
However, it said more tax cut measures are needed.
Six of 10 respondents in the transportation sector reported paying more tax due to higher rates and unclear deductible items. Nearly half of information technology, cultural innovation, and forensics consulting firms also paid more tax due to higher rates, the bureau said.
"We suggest extending preferential policies to delivery companies to help them through the tough environment," it said. "Rates need to be lowered for some businesses in the service sector."
The bureau found companies are also seeking more instructions from tax authorities, and those paying higher taxes want a streamlined procedure to apply for subsidies to cover excessive tax payments.
Authorities said earlier the VAT program had reduced tax revenue by 4.45 billion yuan (US$713.4 million) in the first six months of this year.
The bureau surveyed 128 participants in the program and found 36 percent reported paying more tax while 24.2 percent reported paying more than 30 percent less tax.
"Small businesses were the biggest beneficiaries of the VAT program," the bureau said in a statement. "The replacement of business tax with VAT eliminates duplicated taxation and offers timely help for companies in difficult economic times."
It said 71 percent of respondents are "very satisfied" or "relatively satisfied" with the program, and some policy uncertainties have been resolved.
However, it said more tax cut measures are needed.
Six of 10 respondents in the transportation sector reported paying more tax due to higher rates and unclear deductible items. Nearly half of information technology, cultural innovation, and forensics consulting firms also paid more tax due to higher rates, the bureau said.
"We suggest extending preferential policies to delivery companies to help them through the tough environment," it said. "Rates need to be lowered for some businesses in the service sector."
The bureau found companies are also seeking more instructions from tax authorities, and those paying higher taxes want a streamlined procedure to apply for subsidies to cover excessive tax payments.
Authorities said earlier the VAT program had reduced tax revenue by 4.45 billion yuan (US$713.4 million) in the first six months of this year.
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