The World Bank reports that Chinese companies have a total tax rate of 68% and more than 10 taxes and fees.

Last weekend, private entrepreneur and chairman of Fuyao Glass, Cao Dewang, announced in an interview that he planned to invest $1 billion in the US to build a factory. At the same time, he said that he was “running away” from the United States because of the cost difference between the real economy such as land price, energy and labor. "The tax burden of Chinese manufacturing is 35% higher than that of the United States." This remark immediately triggered a heated discussion about the domestic corporate tax burden.
For a long time, the debate on corporate tax burden has been incessant. The director of the Central Bank’s Bureau of Investigation and Statistics, Sheng Songcheng, wrote in March this year that China’s corporate tax burden is at a high level internationally.
Analysts believe that due to the uneven distribution of taxes, coupled with the impact of production capacity, resources, land and other prices on corporate costs, the company's "pain" is more obvious. How to scientifically design and effectively simplify the VAT split and tax rate is an urgent problem to be solved in the reform of corporate tax burden.

How many kinds of taxes do Chinese companies have to pay?
Li Chunyu, an associate researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, told the Beijing News that according to incomplete statistics, there are more than 10 types of corporate taxes and fees.
Many experts said that corporate income tax and value-added tax are the “big heads” paid by the company. According to the 2008 Income Tax Law of the People's Republic of China, the general corporate income tax rate is 25% of the taxable income, but the Income Tax Law also stipulates various tax benefits: for example, for small and small enterprises that meet the requirements, minus 20 The tax rate of % is levied; for high-tech enterprises that need to be supported by the state, the tax rate is reduced by 15%.
According to the regulations of the Ministry of Finance, China's current VAT maximum tax rate is 17% of product value-added (excluding small-scale taxpayers), with a minimum of 3%. In contrast, Japan has a VAT rate of 5%, South Korea and Vietnam are both 10%, and Singapore is 7%.
A tax expert who did not want to be named said that compared with the United States, many taxes in China are different. China imposes value-added tax on enterprises, which makes enterprises increase taxes in the production process. The US collects sales tax, which is paid in the final sales, but the sales tax is collected by the states, so there is a big difference. That is to say, in China, whether a company is profitable or not is subject to VAT in production, while in the United States, companies are not required to pay taxes on non-profit.
In addition to paying taxes such as income tax, value-added tax, and consumption tax, some enterprises in China still pay about 13% of additional taxes on this basis, including 7% of urban maintenance and construction fees, 5% of education surcharges, and 1%. Flood protection fee.

How many tax burdens do Chinese manufacturing companies have?
In the end, is there a multiple tax burden for a company? The Beijing News reporter chose Gree Electric and another manufacturing company Kangli Elevator as a sample.
The 2015 Social Responsibility Report released by Gree Electric shows that in 2015, the company paid a total of 14.816 billion yuan of taxes, the total revenue of the year was 100.564 billion yuan, the net profit was 12.532 billion yuan, and the tax accounted for 14.7% of Gree's operating income. This is equivalent to 1.18 times the net profit.
According to the annual report of Kangli Elevator, the taxes and fees paid by the company to the country in 2015 were 336 million yuan, which is equivalent to 10.27% of the company's total revenue of 3.27 billion yuan and 68.8% of the total net profit of 488 million yuan.
Li Dongsheng, chairman of TCL, said at the two national conferences this year that under the background of the global economic slowdown and insufficient market growth, the average profit rate of China's manufacturing industry has been less than 2%. Industrial construction, education surcharges and other manufacturing surcharges account for nearly 0.5% of sales revenue, accounting for about a quarter of the average profit. This puts pressure on manufacturing companies with lower profits.
Liu Shangxi, director of the Institute of Fiscal Science of the Ministry of Finance, said in an interview with Xinhua News Agency during the two sessions that the “tax sense” of enterprises is mainly due to the uneven distribution of tax revenues, which are light and heavy, which makes some enterprises feel more painful. In addition, China's tax system is imperfect, the tax base is narrow, and it is transmitted to enterprises, and it may feel that the tax burden is heavy.
Sheng Songcheng, director of the Bureau of Investigation and Statistics of the Central Bank, wrote in March this year that the corporate tax burden of China is at a relatively high level internationally. Sheng Songcheng uses the total tax rate in the World Bank's World Development Indicators to measure the tax burden of the company. The total tax rate refers to the ratio of corporate taxes and compulsory contributions to commercial profits. In 2013, the total tax rate of Chinese enterprises was 67.8%, which was not only significantly higher than that of developed countries, but also significantly higher than that of developing countries such as Thailand and South Africa, only slightly lower than Brazil.
According to the latest report released by the World Bank and PricewaterhouseCoopers, in 2016, the total tax rate of Chinese companies reached 68%, ranking 12th in the world.

How to "retain" a manufacturing company?
In 2016, the private investment has experienced a cliff-like decline. According to data released by the National Bureau of Statistics in December, from January to November 2016, private fixed-asset investment increased by 3.1% year-on-year, while private fixed-asset investment in the same period of 2015 increased by 10.2% year-on-year. In other words, as of November, China's private fixed asset investment growth rate decreased by 7.1 percentage points compared with the whole year of 2015.
Ren Zeping, chief economist of Founder Securities, said in a recent research report that private investment is mainly private, individual and collective investment, distributed in the three major areas of manufacturing, real estate and labor-intensive low-end services.
With the continuous increase of overseas investment by private enterprises in the sector, especially how to keep manufacturing enterprises in China has become a hot topic in the industry.
“Domestic manufacturing has encountered some bottlenecks, such as capacity bottlenecks and resource bottlenecks, including labor, raw materials, infrastructure and other resources, as well as the impact of rising land prices on corporate costs.” Dong Dengxin, director of the Institute of Financial Securities at Wuhan University of Science and Technology, said.
"To help enterprises reduce taxes and reduce losses." Dong Dengxin said that the biggest source of tax revenue in China is enterprises. In the future, we must start from the reform of tax structure and reduce the tax burden of enterprises. At the same time, for companies with higher prices such as coal, electricity and crude oil, the government can use fiscal means to increase financial subsidies to reduce the cost of enterprises. At present, the trend of population aging is obvious. If the policy of delaying retirement is implemented next year, it will help provide more effective labor supply and reduce labor costs.
Dong Dengxin believes that private enterprises can be encouraged to set up branches in foreign countries and circumvent trade controls through foreign factories to expand market share. However, if enterprises move abroad to "evade" the domestic situation, they need to be rethought.

What is the difficulty in reforming corporate tax burden?
A tax reform expert who did not want to be named told the Beijing News that the current goal of corporate tax reform is to reduce the value-added tax, while increasing the proportion of personal income tax in the case of ensuring the stability of the state's fiscal revenue.
The above experts said that the company's value-added tax is ultimately reflected in the price of the product. In the reform, lowering the value-added tax and making products and services cheaper, this can reduce the “indirect taxation” of most middle- and low-income groups. The above experts said that this is the direction of future reforms, but there are difficulties in raising the tax collection, and it takes time for the public to accept.
The above-mentioned experts told the Beijing News reporter that the tax and fee issue is not as much a problem as the cost of the enterprise, and the “gray” cost of the company’s actual payment of taxes. This involves whether the local tax authorities are doing things according to the regulations, as well as the division of power and taxation. Institutional mechanism reform.
In addition, the "Blue Book of Economics 2017" issued by the Chinese Academy of Social Sciences pointed out that the current VAT rate has many files and the gap between industries is large. Therefore, how to scientifically design and effectively simplify the VAT split and tax rate is an urgent need to solve the corporate tax burden reform. The problem.
Yang Zhiyong of the Chinese Academy of Social Sciences mentioned the problems in the reform in the "Local Finance Research" article. "At present, there is a tax burden problem in the VAT reform, and the tax burden of VAT. The taxpayer is meaningful for the actual tax burden. Paying attention to the nominal tax burden may not be conducive to the deepening reform of the value-added tax system, and it is also easy for the reform to deviate from the direction."

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