Comment: Resource tax reform is the trend of the times

Recently, a "Provisional Regulations on the Resource Tax of the People's Republic of China" (the "Regulations") has been circulated in the industry. According to the "Regulations", the resource tax on crude oil and natural gas will be changed from "received quantity" to "ad valorem rate", the tax rate is 5%-10%, and the resource tax quota of coal will be from the original "0.3 yuan per ton to 5 yuan" increased to "0.3 yuan to 8 yuan per ton." At the same time, on July 16, Guo Xiaolin, deputy director of the General Office of the State Administration of Taxation, confirmed that the pilot program to expand the resource tax reform has been reported to the State Council.

As the State Council continues to convey confidence in controlling inflation, promoting resource tax reform has also become an important measure to stabilize and increase state tax revenue. The expansion of the resource tax pilot scope has a positive effect on solving the current resource tax price inversion, improving the efficiency of resource use and promoting environmental improvement. However, the author believes that the pressure of resource tax reform is also huge. First, the monopoly power of the upstream and downstream industrial chains of central enterprises such as PetroChina has caused the current resource tax reform to fall into the containment of interest groups. Secondly, the contradiction between the increase in local government revenues has made the local government have certain decision-making power and hopes to finally obtain corresponding benefits. However, it should be noted that at present, China's fiscal revenue has been increasing at a much faster rate than economic growth. At the same time, the fiscal and taxation system reform has never taken substantial steps. At the same time, fiscal and tax revenue-increasing projects continue to expand, resulting in national income distribution. More and more shifts to state-owned and government departments, and the economic restructuring has been faltering. From this point of view, the promotion of resource tax reform and tax reform should complement the economic transformation.

In fact, at the beginning of June, the State Council approved the Opinions of the National Development and Reform Commission on the Key Tasks for Deepening Economic System Reform in 2011, the relevant person in charge of the National Development and Reform Commission said that the "Opinions" proposed to focus on resource product prices, taxation systems, and monopoly this year. Intensify reforms in industries, financial systems, and foreign-related economic systems, and accelerate the establishment of institutional mechanisms that are conducive to the transformation of economic development patterns. It can be seen that the price reform of resource products has been ranked first in these tasks.

In fact, from the needs of economic transformation in recent years, the reform of deepening resource prices and factor markets has been raised in recent years, but the timing is always vacillating. Considering that the prices of electricity, oil, water and other resources have been strictly controlled, and related industries are entrenched in giant central enterprises, it is difficult to make breakthroughs in market mechanism reform this year. According to the data released by the National Energy Administration, the national crude oil output last year was 189 million tons. If the current amount is calculated, according to the current standard of 28 yuan per ton implemented in most regions, the total petroleum resource tax is about 5.3 billion yuan. The price calculation is based on the calculation of the domestic crude oil price of 5,000 yuan per ton. At a tax rate of 5%, the national petroleum resource tax will reach 47.25 billion yuan per year, which will undoubtedly be opposed by the giants of the central enterprises. Therefore, this year’s reforms are mainly based on price changes.

For a long time, the prices of domestic resource products have been underestimated to varying degrees, and they have provided a soil for survival for a large number of high- and high-capital industries. At the same time, mismatches such as “planned electricity and market coal” have also created a situation in which power generation capacity is idle and power shortages. However, when inflation expectations have not eased, the introduction of resource product price reforms will inevitably increase inflationary pressures. From the timing of the choice of government policies, when the inflation trend tends to be flat, it is possible to adjust the price. This means that as long as economic growth remains stable, rising resource product prices and labor prices will stabilize current inflation at a higher level, and China will enter a relatively high operating cycle.

The most noteworthy issue is the current tax reform. Up to now, only some adjustments have been made to the personal income tax, and the overall tax reform has not progressed. The resource tax reform will further increase government tax revenue. According to the data released by the Ministry of Finance, in the first half of this year, the resource tax was 30.763 billion yuan, a year-on-year increase of 44.9%. At the same time, from January to May, the total revenue of oil and gas resources tax was 2.109 billion yuan, a year-on-year increase of 596.04%. Since the core of the resource tax reform is to change from measurement to pricing, and then to the national roll-out, this is a considerable income for the government. At the same time, the scope of VAT expansion, the expansion of consumption tax, and the expansion of property tax will all bring new sources of revenue to the government. A positive idea is that these tax revenues can enable local governments to gradually get rid of their dependence on land sales revenue and curb resource waste and environmental pollution through taxation, thus contributing to the long-term development of the Chinese economy.

However, things are not so simple. From the current fiscal expenditure structure, a large amount of income is used for infrastructure investment, which not only causes overcapacity of these investments, but also encroaches on the expenditures of other people's livelihood security projects that need to be invested. Therefore, only by further promoting the structural transformation of fiscal expenditures, the government will further withdraw from the profit-seeking of investment and eventually return to the protection of public service projects. After all, China's tax revenue cannot grow at an unrestricted rate. When monetary policy is difficult to relax due to inflation, corporate and personal income is taken away by taxation, and a considerable part of tax revenue is used for inefficient investment. . This has caused a large number of SMEs to upgrade without being competitive, and household consumption cannot be expanded.

All in all, with the further strengthening of resource constraints, the introduction of resource product price reform is the general trend. However, if, after the reform of the tax system is promoted, while the income is growing steadily, if the original structure of fiscal expenditure is maintained, it is expected that the expectation of structural adjustment through price adjustment will fall short. For SMEs, It is possible to enter a more difficult period of development.  

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