Yang Weimin: The VAT Rate In The Financial Industry Is 6%, And The Manufacturing Industry Is 16%. This Is Unreasonable

- Sep 11, 2018-

Yang Weimin: The VAT rate in the financial industry is 6%, and the manufacturing industry is 16%. This is unreasonable!


According to the Southern Metropolis Daily: Last month, at the Nankai Finance (Dawan District) Chief Economist Forum held in Guangzhou, the former director of the China Finance Office, the current Standing Committee of the National Committee of the Chinese People's Political Consultative Conference, and the deputy director of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference, Yang Weimin gave a keynote speech. Calling for lowering the tax burden for the manufacturing industry, it is believed that the excessive development of the financial industry will also cause economic imbalances.

Yang Weimin believes that tax cuts and fees reduction until the final elimination of "fee" is the long-term direction of reform, and the direction of tax cuts, he believes that the core and most important thing is to reduce the tax rate of manufacturing value-added tax.

"We all know that the financial industry has high income and high profits. The profits of several banks in listed companies outweigh the profits of other real economic enterprises." In terms of taxation, the tax rate of the financial industry is much lower than that of the manufacturing industry. It turns out to be 17% VAT, and how much is your financial industry paying? 6%. This is unreasonable, so high profits, and then such a low tax rate."

Yang Weimin believes that excessive development of the financial industry will also cause economic imbalances. "The more developed the financial industry, the heavier the burden on the real economy." He said that in 2016, 24% of Peking University and Tsinghua graduates chose to work in the financial industry, while only 4% of the manufacturing industry and 11% of the research were "this is very dangerous."

In China, the financial industry has the highest profit, but the tax burden is the lowest. This unreasonable tax level has been maintained for many years, but there has been no change. It is really surprising.

The data shows that in 2017, 26 listed banks achieved a total operating income of 3.88 trillion yuan and a net profit of 1.39 trillion yuan. Last year, 3,142 A-share companies achieved revenues of 35.61 trillion yuan, an increase of 17.03%; total net profit was 3.145 trillion yuan, an increase of 20.93%. Among them, the net profit of listed banks accounted for more than 40% of the total net profit of A shares.

In terms of tax burden, the income tax of A-share companies in 2015 was 13.34%. The profit tax burden reached 147.52%. From the industry point of view, the average profit tax burden of the extractive industry in 2015 was as high as 1034.55%, which was the highest in all industries. In the financial and insurance industry, the average profit tax burden was the lowest in all industries, which was 72.86%.

In the manufacturing sector, which accounts for half of the A-share market, the income tax burden in 2015 is 9.06%, and the profit tax burden is 179.28%, which is higher than the average profit tax of A-shares. The tax revenue of the entire financial industry reached 12.67% of the national total tax revenue, while the non-financial industry was about 87.3%. This shows that finance, especially banks, is really profiteering, but enjoys the lowest tax burden. The non-financial industry contributes 60% of the profits, but contributes nearly 90% of the tax. Yang Weimin called for a structural adjustment of tax cuts. The most central, most important and most important thing is to reduce the tax rate of manufacturing value-added tax.

This is the most urgent policy of the Chinese economy. Loose, infrastructure, is not as good as tax cuts for the manufacturing industry. This policy call has been raised many times recently, and the industry is constantly on the table, but it has not been able to land. The PMI data released in early August showed that the PMI of large enterprises was 52.4%, the PMI of medium-sized enterprises was 49.9%, and the PMI of small enterprises was 49.3%, which was 0.5 percentage points lower than that of the previous month and continued to be below the critical point.

The manufacturing industry relies on the dual support of technology and market to gain benefits. Without any one, it is difficult to get benefits. Even if you can get the benefits, most of the profits are extremely low, and the market may change slightly, and there may be losses.

On the contrary, banks mainly obtain spreads and gains through loans based on deposits of enterprises and residents. More importantly, banks rely on monopoly and use innovation as an excuse to gain benefits that are not available in market competition. If you increase the consultant fee, consulting fee, deposit deposit, tying wealth management products, etc., and the actual income is more than interest.

It is precisely because of this that the bank's profits are quite high, so the manufacturing industry is simply incomparable. Under such circumstances, the value-added tax rate of the manufacturing industry is even higher than that of the banks. Obviously, it is unreasonable and is not conducive to the development of the manufacturing industry. Especially in the context of fierce economic competition, it is even more unreasonable.

Therefore, it is necessary to make appropriate adjustments to the value-added tax collection methods of manufacturing and banks in accordance with the actual economic development. In particular, it is necessary to reduce the tax rate of the manufacturing industry. At least, in the current economic difficulties, it is possible to appropriately reduce the manufacturing VAT rate and increase the bank VAT rate.