Behind the tax turmoil: land sales are declining, and the knife is moving to the "tobacco, alcohol and oil cars", and the tax on the rich is on the bow

Blue and white view of the property market

2024-06-20 19:56Posted in Henan real estate creators

Hello everyone, I'm Blue and White.

On June 18, the State Administration of Taxation answered reporters' questions, which mentioned:

"The tax department has not organized and carried out national, industry-wide, and centralized tax inspections, let alone arrangements for 20 or 30 years of retrospective inspections."

He also said that "both tax and enterprise parties have always shared weal and woe" and "supported legal means to actively and properly resolve tax-related disputes".

These words have a background, and there is a lot of trouble recently: paying taxes.

Ningbo Bohui announced a few days ago that it would stop production because it received a tax payment notice in March.

This supplement is 500 million.

The origin of the matter is that last year, the State Administration of Taxation stipulated that heavy aromatics should be taxed according to naphtha.

Bohui thought of a way to transform the production line, and the product changed from heavy aromatic hydrocarbons to heavy aromatic derivatives, and also made a declaration.

My main business has become a derivative, so it won't be taxed, right?

Who knew that this year, a notice came down to the heart, and derivatives would still be subject to consumption tax.

From July to December last year, Bohui's heavy aromatic hydrocarbon derivatives sold 140,000 tons, and 80,000 tons in the first three months of this year.

If you want to be taxed, the tax burden per ton will reach 2,152 yuan, and you will have to pay nearly 500 million yuan.

Ningbo tax also responded, in November last year, it had sent a risk reminder sheet, and there were many talks in the middle, but the company did not cooperate.

The key point of this matter is: after the transformation, it becomes a derivative, does it meet the tax standards? Are there good reasons for tax avoidance?

Is it speculation and tax avoidance, and if you dare to investigate, you will go bankrupt? Or will it be collected in the future if it was collected or not?

If you know about chemical industry and tax law, you can talk about it in the comment area.

In addition to Ningbo Bohui, VV Shares, Shunhao Shares, and Peking University Pharmaceutical have all issued announcements on tax payment.

My friend is a finance worker who often goes to the tax office, and he told me that it is impossible to check the general back.

Because the tax bureau has no manpower at all, many supernumeraries have been cleaned up last year, and the original staff is not familiar with the front-line business, and some offices have been sitting for a long time, and they have to go to the window, and it is difficult to do business, and they can't support large-scale general investigations.

I think that if it is verified that tax evasion and tax evasion are verified, it will be more unfair to enterprises that pay taxes honestly.

However, as soon as the words "tax payment" and "30 years of backchecking" came out, especially in the past two years, it is not easy for many manufacturing enterprises, factories, and self-employed people to make money.

To check, can you give priority to the big Internet celebrities, big anchors, big MCNs, celebrities with sky-high salaries, and rich people who hide their assets?

Checking back 30 years is a false alarm, and today Lanbai wants to talk to you about different concerns.

Hidden in these tax notices, there is a common keyword: consumption tax.

Yes, what we are going to talk about today is the increasingly urgent issue of tax reform in an environment where local revenues from land sales have fallen sharply and the powers and responsibilities under the tax-sharing system are unshirkable.

The consumption tax reform has been proposed since 2019: "adjust and optimize the scope and tax rate of consumption tax, promote the backward transfer of the collection link and steadily delineate the localities".

It's just that in the past few years, the land has not been sold, and in the final analysis, the supporting measures have not been implemented.

It wasn't until the land sales in the past two years that the consumption tax was brought up again.

For the first time in the "Budget Report" in March this year, a sentence was written: "Study and improve the local tax system and promote the reform of consumption tax."

The arrow was on the bow, and it had to be sent.

Why is it more urgent to reform the consumption tax now?

This also starts with the tax sharing system.

In the reform of the tax-sharing system 30 years ago, the main taxes were paid and financial resources were greatly concentrated.

From 1994 to 2023, the central government's fiscal revenue increased from 290.65 billion yuan to 9.95 trillion yuan.

In this way, a system of tax rebates and transfer payments can be established, ensuring the equalization of public services between different regions.

For example, in the early days of the reform of the tax-sharing system, Qinghai's per capita fiscal income was 150 yuan in 1994, and Shanghai's was 1,300 yuan, 8.7 times that of Qinghai.

By 2022, Qinghai's per capita fiscal income will increase to 5,500 yuan, while Shanghai's is 30,700 yuan, narrowing the gap to 5.6 times.

With transfer payments, the disparities between regions are not too outrageous.

But in this way, it is very difficult for the local government to do it: less money is collected, and there is more to do.

For example, the "trivial matter" of road maintenance, the accumulation of contradictions has become more and more prominent.

Since 08, the central government has been collecting the consumption tax on refined oil products, and then transferring the payment to the local government.

However, the mileage of road maintenance has skyrocketed to 5 million kilometers in recent years, and the annual gap has reached 300 billion yuan.

Others, such as medical care, health, education, urban construction, affordable housing, and municipal administration, all cost money.

Where does the money come from?

Back then, the housing reform was born, the place could sell the land, and the house could be loaned...

The curtain of land finance was opened, the air was filled with the smell of money, and by 2013, local governments were allowed to borrow, which was like a tiger with wings, and new cities were rising from the ground, and the finance took off in situ.

But life is a problem on top of a problem, and the land is the mother of all things, but it is not omnipotent.

In the first four months of this year, the income from land sales fell by more than 1 trillion yuan compared with the same period four years ago, which is still the figure of many local urban investment support.

Along with the decline in income from land sales, real estate-related tax revenues are also falling rapidly.

This money is all exclusive to the locality.

According to the framework of the current tax-sharing system, among the 18 types of taxes in the mainland, there are 8 local exclusive taxes, and the total revenue in 2022 is 2.06 trillion yuan.

Among them, the revenue of five real estate-related taxes is 1.92 trillion yuan, which can account for 93% of the exclusive tax revenue of the eight localities.

The fall of real estate has caused secondary damage to upstream and downstream industries.

For example, from January to April this year, value-added tax, personal income tax, and stamp duty are all falling.

Consumption tax can also be raised by cigarettes, liquor, and refined oil.

In addition to the decrease in land sales income and real estate tax revenue, there is another reason why the local government is feeling great pressure: replacing business tax with value-added tax.

Before replacing business tax with value-added tax, business tax was a local main tax, with a scale of up to one trillion yuan;

After the VAT reform, the business tax of the service industry was replaced by value-added tax, although the value-added tax sharing ratio was adjusted from 75:25 to 55 from the central government, but the local government lost the main tax.

What should I do if I have less and less money to collect and more and more things to do?

Speaking of which, it is nothing more than eight big words: the power of affairs is shifted upward, and the financial power is decentralized.

Where does the money come from?

There are only two options, one is the real estate tax that is called for every year, and the other is the consumption tax.

The real estate tax is almost coming out two years ago, and everything is ready to be put on the doorstep, but the real estate collapse is too inopportune, so it can only be put on hold temporarily.

It is a matter of time before the property tax is levied, but the current environment cannot withstand it.

The land auction and sales are already so miserable, if the levy is launched, the levy will be less, and it will only occupy a name like Chongqing, which is meaningless.

It is counterproductive to levy too much, and now we are trying our best to attract the rich to improve the group, and scare away all the people who buy houses?

It's very simple, there are 5 birds in the tree, you shoot one out, how many birds are left?

Therefore, short-term consumption tax is almost the only option.

There are four major types of taxes in the mainland.

In 2023, VAT will account for 38.3%, corporate income tax (22.7%), consumption tax (8.9%) and personal income tax (8.2%), with the four major taxes accounting for 78% of tax revenue.

Among them, the value-added tax is divided into 55 by the central government, and the enterprise income tax and personal income tax are divided into 64 by the central government.

Only the consumption tax, as the third largest tax at present, is the only tax exclusive to the central government.

Now the GST has three characteristics:

1. The tax base is very narrow, and the main tax burden is concentrated in the four major items of tobacco, oil, car and wine.

2. It is mainly levied on manufacturers, and downstream consumers usually do not feel it.

3. All the taxes collected are paid, and there is no place to go.

Corresponding to two reform directions:

1. If the tax base is narrow, then expand the scope to include more luxury goods and high-end consumer goods.

At present, among the 15 categories of consumer goods, tobacco, alcohol and oil vehicles contribute 99% of the revenue, cigarettes account for 55.7%, and refined oil accounts for 31.4%.

Highly polluting consumer goods such as single-use plastic products, as well as private jets, more luxury goods such as watches, bags, jewelry and jade, also need to be included.

There are also service consumption that are not included, for example, the entertainment industry was charged a tax rate of 5%~20% before the VAT reform, and later changed to 6% VAT, and there is also room for improvement.

Smokers and drunkards, as well as rich people who buy luxury cars and brand-name bags, play golf and bowling, want to spend and pay more, shouldn't they be?

2. The levy is transferred from the production link to the wholesale and retail link. From a central exclusive tax, to a central and local shared tax.

Taxation in the production process has actually increased the burden on enterprises, and tax evasion and tax evasion are not uncommon.

At the beginning of Bohui, there may be tax disputes, but the consumption tax that has been recovered by other announcements is by no means necessarily a white lotus.

There is a calculation in the Shenwan report that the backward movement of consumption tax collection may bring an annualized tax increase of 100 billion.

Where there is strong spending power, the more taxes will be levied, and it is an international practice that "whoever consumes, who pays the tax", which is very fair.

But when it is really implemented, it will definitely touch the interests of the original "place of production".

For example, Shanghai and Hubei are major producers of cigarettes and automobiles, Yunnan and Hunan are major producers of cigarettes, and Shandong and Liaoning are major producers of refined oil.

If it is changed to a place of consumption, these provinces will definitely not agree.

A large liquor consuming province like Henan and a major auto consuming province like Guangdong are of course happy to see it happen.

Therefore, the expropriation link will be moved back, and it will probably be the first to be piloted and then rolled out, leaving a part for the local government, and the rest will have to rely on the transfer payment of the central government to balance the interests of all parties.

As mentioned above, the reintroduction of consumption tax is the first shot of tax reform in an environment where the income from business tax reform is superimposed on the decline in land sales income and the mismatch between financial power and administrative power.

The direct taxes such as real estate tax, inheritance tax, interest tax, and capital gains tax are the hard ones to bite.

Smokers, drunkards, luxury cars and watches must be collected, inheritance, multiple houses, huge deposits that occupy the top of the tower, and cash-out speculation that buys low and sells high.

Some people say that these "taxes on the rich" will scare the rich away, and when they see the tax increase in Britain and France, the rich people vote with their feet, flip the table and stop playing.

Wrong, Europe and the United States are so fierce that even they are afraid of themselves, our problem is, there is no tax on property when it is small, and it has to be changed from 0 to 1 first, right?

Some people also say that the change is too slow, and they all know how to change it next, but they can't see the landing for a long time.

Let's put it this way, any kind of reform will breed new contradictions while resolving old contradictions.

It is nothing more than "grasping the big and letting go of the small" and "having priorities".

It is a childish choice.

Weighing the pros and cons and balancing the interests of all parties is the trade-off to be made in reality.

I'm Lan Bai, let's talk about this today, and we'll see you next time.

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