Guangdong's state tax department has taken a number of measures aimed at propelling the transformation and reform of value-added tax (VAT), expediting the pace of export VAT rebate, assisting enterprises in solving practical problems, and promoting the steady development of the local economy. In the first quarter of this year, the amount of export VAT rebate paid to Guangdong enterprises reached Rmb46.859 billion, up 27.2%.
According to Zhou Jiaxi, deputy director of the Guangdong provincial state tax bureau, in a move to fight the financial crisis and promote economic growth, the central government has introduced a series of structural tax reduction measures. These mainly include: implementing VAT transformation and reform; lowering the tax rate on small-scale taxpayers; introducing reform on the prices, taxes and charges of processed oil; reducing the purchase tax on small-displacement passenger cars; raising export VAT rebate rate; temporarily exempting individual income tax on interest income from savings deposits; and adjusting the method for collecting stamp duty on securities (shares) trading.
Zhou said the Guangdong state tax department is taking proactive measures to ensure that the above tax policies can be implemented promptly and fully so that enterprises can stand to benefit to the largest extent. In late April, the Guangdong state tax bureau held a special panel discussion on the new tax policies in order to understand the problems and difficulties encountered by enterprises in the course of implementing the policy. At present, implementation of the structural tax reduction policy in Guangdong has shown early signs of success.
On a micro level, the structural tax reduction policy has alleviated the tax burdens of enterprises in Guangdong while increasing the disposable income of enterprises and individual residents. For instance, where VAT transformation and reform is concerned, in the first quarter of this year the amount of deduction for input VAT paid on purchases of fixed assets by Guangdong enterprises reached Rmb1.146 billion. It is estimated that for the whole year the tax burden on general taxpayers will be lowered by over Rmb12.5 billion. As for VAT rebate rate adjustment, the raising of VAT rebate rate has given a boost to Guangdong's exports. In the first quarter of 2009, export VAT rebates handled by state tax departments across the province amounted to Rmb46.859 billion, a growth of 27.2%.
On a macro level, the structural tax reduction policy introduced by the state, covering the three aspects of consumption, investment and export, has effectively served to stimulate the investment sentiment of enterprises, whet the consumption appetite of the people, and promote the expansion of export. VAT transformation and reform is definitely playing a stimulus role in expanding fixed asset investment. According to statistics of the state tax department, the sentiment of enterprises in re-investing in production is growing gradually, resulting in the continuous rise of the amount of deduction for input VAT paid on purchases of fixed assets.
