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Circular No. 25 shows that the preferential policies in the contracts signed by local governments and enterprises continue to be effective; the parts that have been honored are not retroactive; the special clean-up work specified in Circular 62 will be carried out after further deployment in the future. This means that the local tax incentives are suspended.
Finance Minister Lou Jiwei has previously said that during the current downward pressure on the economy, how to carry out tax clearance work "must be properly considered according to the situation." In response to this, many interviewed experts also said that this is the result of the central and local game in the interview with the reporter of China Times, because in the short-term economic development dilemma, the tax incentives are very attractive to local investment.
Tax settlement
According to the No. 62 document issued by the State Council in November last year, all regions and relevant departments should carry out a special clean-up, carefully check the preferential policies for taxation and other policies formulated by the region and the local government, especially the contracts and agreements signed with enterprises. Carry out a comprehensive review, find out the bottom, and make sure there are no omissions. Through special clean-up, preferential policies that violate national laws and regulations will be suspended, and documents will be abolished.
The promulgation of Circular 62 is closely related to the reform theme of "Deepening the reform of the administrative system and effectively transforming the government functions" that Premier Li Keqiang has always advocated. Since the Third Plenary Session of the 18th CPC Central Committee, the clean-up and regulation of preferential tax policies has been put on the agenda. The State Council has also clearly stated that “regulations and laws and regulations other than those prescribed by the State Council will cease to be implementedâ€.
Based on this, the State Council issued a far-reaching No. 62 document, requiring the provinces to carry out special clean-ups and abolish preferential policies that violate national laws and regulations. This means that the local government will comprehensively clean up the tax incentives, and the preferential terms of the local government and the enterprises involved in the recovery will be suspended.
However, in the past six months, Circular 62 was replaced by Circular No. 25 issued by the State Council. A large-scale national tax clearance work also came to an abrupt end.
In this regard, there is a view that the reason for stopping the No. 62 document may be a “self-correction†by the State Council, or it may be a compromise to deal with the current downward pressure on the economy.
The reporter found that the No. 62 document required a “one size fits all†cleanup and required immediate implementation, and the document issued this time arranged a transition period, providing time for “alleviationâ€. In this regard, Mu Xingtao, the person in charge of the Investment Promotion Bureau of a city in Shanxi Province, believes that the suspension of the tax incentives, as well as the rate cuts, is a response to the downward pressure on the economy.
More respondents also agree that under the downward pressure of the economy, it is more important to “release water and raise fishâ€. If the tax concessions are cleaned up at this time, the result will only be “exhaustion and fishingâ€, and a group of enterprises will withdraw and leave.
A publicly reported case was that during the two sessions, the governor of Sichuan Province Wei Hong told Li Keqiang “complaintsâ€: No. 62 led to 410 projects in Sichuan Province that were still under implementation and 290 projects that had not been implemented yet. Nearly 100 billion investment. After listening to Li Keqiang, he arranged the relevant person in charge of the State Office on the spot. After the meeting, he docked with the financial department and pointed out that it is necessary to correctly understand the preferential policies for clearing taxes, and to clean up the so-called illegal, unreasonable, vicious competition and unfair competition. Preferential policy.
Give way to local economy
In fact, the Third Plenary Session of the 18th CPC Central Committee clearly stated that it is necessary to comprehensively clean up tax incentives. Lou Jiwei also pointed out in a number of public occasions that tax incentives are too much, and taxation is “squattingâ€, affecting fair competition and market unification, and must be cleaned up.
Then, in order to implement the State Council Document No. 62, the Ministry of Finance also issued a document requesting the provinces to start taxation and other preferential policies to standardize the clean-up work, and create a good atmosphere for improving the local tax system.
It is reported that the original intention of the state to vigorously clean up the preferential tax policy is to improve the local taxation system and lay a solid foundation for the long-term development of the local economy. "Limiting time-saving tax incentives can create an important pillar for the local tax system, including creating positive conditions for reforms in the reform of the camp." Wang Junjun, dean of the Financial and Economic Research Institute of the Central University of Finance and Economics, said in an interview.
However, the current downward pressure on the economy has increased, and the policy of clearing tax incentives has met with resistance from various places. "Before, tax concessions have always been a magic weapon for attracting investment and developing the economy everywhere." Mu Xingtao told the reporter of China Times. However, in Wang Qijun's view, many preferential policies run counter to the statutory principles of taxation, and there are interests in rent-seeking and corruption.
In addition, this year coincides with the year of the reform of the reform of the camp. At the press conference of the State Council, which was attended by reporters not long ago, Lou Jiwei once hinted that this year’s reform should be completed according to the plan, but this is also his One of the most troublesome questions, "I don't dare tell you which day I can come out. Anyway, I will come out this year." Lou Jiwei said.
So far, only the real estate industry, construction industry, financial industry and life service industry have not yet carried out the reform of the camp, but it is obviously not much time to realize the idea that “the camp reform will achieve full coverage in 2015â€, so the market predicts that the camp will increase. Maybe it will speed up soon.
In the interview, the reporter was informed that not long ago, all localities were actively carrying out tax clean-up work, and the reserve camp was changed. For example, Henan, Gansu and other provinces are carrying out a comprehensive clean-up of business tax throughout the province. Among them, the clean-up work in Henan Province began from April 1, 2015 to August 31, and comprehensively cleared all business taxpayers in the real estate, construction, financial and insurance, and life service industries. “The clean-up work was included in the 2015 performance management appraisal by the provincial bureau.†On May 14, the staff of the Policy and Regulations Department of the Henan Provincial Local Taxation Bureau told the Huaxia Times that clearing taxes is an important part of improving the local tax system. way. However, the suspension of the local tax incentives will undoubtedly have a certain impact on the promotion of the camp. 
State Council "self-correction": tax and fee concessions clean up the road to economic development
Abstract On May 11, a new tax adjustment notice issued by the State Council triggered many concerns. The "Notice of the State Council on matters related to preferential policies such as taxation" (Guo Fa [2015] No. 25) (hereinafter referred to as Circular 25) is aimed at the "State Council on Qing...
On May 11, a new tax adjustment notice issued by the State Council triggered many concerns. The Notice of the State Council on Relevant Matters Concerning Taxation and Other Preferential Policies (Guo Fa [2015] No. 25) (hereinafter referred to as Circular No. 25) is for the Notice of the State Council on Clearing and Regulating Taxes and Other Preferential Policies (ie No. 62) The latest adjustment instructions.