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The tax cuts down costs: the government will tighten their belts, the people will live a good life!

2018-10-13 18:41 The observation of Changan TF003

Recently, finance minister Liu Kun said in an interview with reporters, has been introduced in the full implementation of the tax reduction fee policy at the same time, pay close attention to the study of more large-scale tax cuts, more obvious drop fee measures really allow enterprises to go, go. So clear, will allow businesses and consumers to see more dividend policy, firm confidence in China's economic development.

Wu Wei mapping

Since the beginning of 2012 replacing business tax with value-added tax(VAT) reform, opened a new stage of the development of China's tax has achieved preliminary results in the power supply side structural reform, reduce the tax burden of enterprises, accelerate the transformation and upgrading of the real economy. Tax rate from 17%, 13%, 11% and 6% in four tranches of tax degenerate to three to 17% and 11%, 6%, the tax system of our country is more concise and is conducive to the elimination of double taxation.

At the same time, replacing business tax with value-added tax(VAT) brought a "multiplier" effect will continue to appear, especially has greatly promoted the development of high-end producer services, and promote the professional division of labor and service outsourcing, gave birth to a large number of Small and micro businesses engaged in research and development and technical services, cultural and creative, has played a positive role for active innovation and entrepreneurial atmosphere.

A massive tax cut down costs, will further improve the enterprise gain a sense of "". Replacing business tax with value-added tax(VAT) has achieved great effect due to tax cuts, but the VAT deduction mechanism, but also affected by the investment cycle, capital structure, management, profitability and other factors, the effect of time lag, some companies do not necessarily feel deep cuts.

At the same time, the current international economic situation is complicated, the contradiction between supply and demand is still prominent, but also to bring no small pressure. In order to deal with these challenges, enterprises must take the core position of innovation in the development, increase technology investment, accelerate the transformation and upgrading. Therefore, through further large-scale tax reduction measures, reduce the cost burden, let the light, indeed to the core demands of the enterprise, lifted their menace from the rear.

A massive tax cut down costs, release the potential of domestic demand, to further improve the signal boost consumer confidence. From a macroeconomic perspective, consumption has become the biggest carriage driving the economic growth of China, the fundamental role of self-evident.

According to the latest statistics, 8 months of this year, the consumer goods market in a single month of $3 trillion the size of the market at the same time, an increase of 9.0%; 1-8 months, total retail sales of social consumer goods rose 9.3%, network consumption has become a new growth point of consumption upgrade. With the rapid expansion of the consumer market, but also constantly upgrading of the consumption structure, the limit above units cosmetics goods rose 12.6%, communications equipment products have also maintained rapid growth of nearly two digit.

There is no doubt that consumption is becoming a decisive force to maintain the sustained and healthy development of China's economic transformation, China has become the main driving state based on domestic demand. The majority of residents, rich to consumption, security to consumption, to continue to expand the consumer market, the first is to enrich the people's pocketbook.

In January 1, 2019 the new tax law will be fully implemented, the tax threshold is adjusted from 3500 yuan to 5000 yuan, but also further deduction of children's education, continuing education, medical, housing or rental housing loan interest and support for the elderly and other expenses, to increase the income of residents, should shun consumption upgrade trend, has important significance to boost consumption confidence. The growth of consumption to promote economic transformation and economic transformation bring greater consumption growth, the two promote each other and bring together more power for the economic development of our country.

A massive tax cut down costs, also sounded accelerate the transformation of government functions, decentralization of the charge. "". At present, some enterprises reflect the approval and certification system of cost not only increase operating costs, but also seriously affect the operational efficiency.

To solve this problem fundamentally, it depends on the government's own reform and innovation, accelerate the transformation of functions, strong decentralization, make the market play a decisive role in the allocation of resources, the government's hand stretched too long back. Tax cuts Jiangfei can undoubtedly reduce government revenue, the cost is no longer wasteful, pay more attention to the service consciousness and service efficiency, further relaxed to the enterprise, to create a better business environment. It has been said "the government will tighten their belts, the people will live a good life," said is the truth.

In short, continuous large-scale tax cuts introduced not only the release of more reform dividends, more become our country economy to speed up the supply side of the structural reform of the "catalyst", optimize the business environment of the "booster", will be the next step in the development of economy of our country to open a broader space.

---- The End developing

Author: Bian Yongzu

(Fellow of Renmin University of China Chongyang Institute of Finance)

Editor: rain

Source: Beijing daily Changan observer

Editor: TF003

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