China’s social transformation has sped up over the last few years. However, issues like the state going forward, and private enterprises retreating surfaced along with exacerbated internal contradictions. As China’s economy slows down, it gets harder to rely on financial revenues and issues like excessive taxes and fees only get more serious. Besides, the shift from operation tax to value added tax increases the actual tax burden of enterprises, which is against the aim of the reform.
November 3rd, a press release of Unirule Research on Corporate Tax Burden was held at Unirule Beijing Office. The research team published their findings and explained how this research was conducted. Experts and team members attended this press release, including Professor Ningyue from Chinese Academy of Social Sciences; Professor LI Weiguang, Tianjin University of Finance and Economics; Professor CAI Chang， Director, School of Taxation, Central University of Finance and Economics; ProfessorXIONG Wei, Wuhan University of Technology; Professor PANG Fengxi, Zhongnan University of Economics and Law; Professor HE Ruili, Dongbei University of Finance and Economics; Mr. TANG Dajie, Secretary General, China Enterprise Institute; Professor ZONG Jiafeng, Nankai University; and Mr. LIU Linpeng, Branch Director, Shanghai Xiaotian Tax Agency.
Professor QIN Sidao, Chinese Academy of Social Sciences, gave an opening speech. He mentioned that the main tax for enterprises was value added tax which was only borne by enterprises, not individuals. This tax showcased a taxation design without civil supervision of the government. Tax burden for enterprises is heavy, in addition to the difficulty of finance, and it has affected the development of private enterprises.
Professor Ningyue introduced the research, background, framework of analysis, main findings, and conclusions. The research report consists of several parts, including the results of the surveys; the interviews of the four cities in four provinces, namely, Hangzhou, Wuhan, Guiyang, and Dalian; and several case studies. This research proposed several principles for the tax reforms.
Mr. ZANG Jianwen of the research team introduced the findings of the interviews and the survey results. He also analysed the forms of the tax burden and effects of operational expenses and costs.
Mr. ZHANG Lin of the research team presented on the results of the surveys. The main findings include: 1. Chinese businessmen feel they are paying too many taxes that hinder the development of their enterprises; 2. the preliminary result of the shift from operation tax to value added tax is worrying as most of the interviewed business owners bear more tax costs than before; 3. about 87% of the interviewed enterprises think the tax burden is heavy; 4. about 40% of the interviewed enterprises think an acceptable ratio of tax should be below 10% of the revenue; and 5. cutting red-tape and simplifying administrative procedures are major concerns.
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