Tax reform benefits district enterprises
Print Edition
Nearly 230,000 Jiading enterprises have benefited from the reform which turns business tax into value-added tax (VAT).
“Our tax payment was cut by over 8,000 yuan (US$1,318) last December,” said the head of Haoyu Advertisement Com. “We can hire two more employees if we want to expand our business this year.”
The reform divides taxpayers into two kinds.
The companies whose annual sales income is less than 5 million yuan are considered small taxpayers while those whose sales income is a larger amount are considered ordinary taxpayers.
By the end of last year, Jiading had 22,321 small taxpayers, accounting for around three-quarters of its total.
Under the rules, the tax rate of most small taxpayers has been reduced from 5 percent to 3 percent. In 2013, the tax payment of Jiading’s small taxpayers was reduced by 193 million yuan.
Tax reform especially benefits research and development enterprises. The rules say that part of the cost of research equipment and materials can be used against tax, and they can also get VAT deduction vouchers from their partners.
Seeing the benefits of the tax reform, more research and development companies settled down in Jiading. Last year, Jiading attracted 1,709 new R&D enterprises.
The reform also improves the development of the service industry.
IT service enterprise Dongpeng Information can now issue VAT invoices to reduce customers’ costs. “We already started to outsource some installment services and focus on high-tech services,” a company official said.
“Currently, the reform of turning business tax into VAT is expanding,” said an official with Jiading’s tax authorities.
“More companies will benefit as the problem of repeated business tax payment will soon be solved.”
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