The rain is coming in time! Manufacturing tax rate cut from 16% to 13% in 2019

Release time:

2019-03-06

The reduction of the current tax rate in the manufacturing industry is a substantial concession to the real economy, which will allow more enterprises to travel light.

The reduction of the current tax rate in the manufacturing industry is a substantial concession to the real economy, which will allow more enterprises to travel light.

On March 5, at the National People's Congress and the National People's Congress, Premier Li Keqiang said in his government work report that a larger scale of tax reduction will be implemented in 2019, with both inclusive tax reduction and structural tax reduction, focusing on reducing the tax burden of manufacturing and small and micro enterprises. In terms of tax reduction and fee reduction, we will further deepen the value-added tax reform, reduce the current 16% tax rate of manufacturing and other industries to 13%, and the current 10% tax rate of transportation and construction industries to 9%, so as to ensure that the tax burden of major industries is significantly reduced, and the tax rate of 6% will remain unchanged. However, through the adoption of supporting measures such as increasing tax deduction for production and life service industries, Ensure that the tax burden of all industries is only reduced, we will continue to promote the three and two tax rates, and grasp the implementation of the inclusive tax reduction policy for small and micro enterprises introduced at the beginning of the year.

In fact, as early as the executive meeting of the State Council held in March 2018, it has been clearly reduced the value-added tax rate of manufacturing and other industries from 17% to 16%, and the value-added tax rate of transportation and construction industries from 11% to 10%. The re-adjustment of value-added tax this time also clarifies the government's determination and strength to reduce the burden on enterprises and stimulate market vitality.

In this regard, the People's Daily commented that the landing of the big tax cuts is a substantial concession to the real economy, which will allow more companies to travel light. In 2018, due to the reduction of the value-added tax rate by 1 point, the tax reduction will be 179.4 billion yuan within 10 months; and this time the tax reduction dividend will undoubtedly increase exponentially.

According to this government work report, tax cuts and social security burden reduction can "reduce the burden of corporate tax and social security contributions by nearly 2 trillion yuan throughout the year", which has exceeded many people's expectations, especially for industries such as manufacturing. A long-awaited timely rain.

The most direct effect of tax cuts is to increase corporate profit margins. The biggest manufacturing industry with the biggest tax cuts this time is a highly competitive industry with thin profit margins, and the biggest problem for many companies in recent years is: high costs, where do you want profits? Even NPC deputy Lei Jun once said bluntly: "Xiaomi's hardware comprehensive net profit margin does not exceed 5%". Among the various costs, in addition to financing costs, employment costs, land costs, logistics costs, etc., tax costs are also one of them.

It is precisely because of this that cost reduction constitutes one of the core connotations of the three to one drop and one to make up. Since last year, how to reduce costs through substantial tax cuts for enterprises has been a key concern throughout the country. From the reduction of the value-added tax rate by one point last year, to the determination of new inclusive tax reduction measures for small and micro enterprises at the beginning of this year, to the release of major tax reduction measures that combine inclusive tax reduction and structural tax reduction today, the frequent use of tax reduction shows that the government's reform commitments are being steadily fulfilled, and the focus of reform is put on solving the practical problems of enterprises.