China’s macro tax burden is as high as 37%, and SMEs are overwhelmed

CICC recently released a research report saying that China’s macro tax burden reached 37% in 2014, once again detonating the topic of macro tax burden.

CICC pointed out in the report that China’s macro tax burden has exceeded the level of developed countries. In this regard, Wang Dongsheng, president of China Taxation Taxation Office, told the China Times reporter that it is not possible to say in general terms that the macro tax burden is light or light, and that “who depends on who is compared”, in fact, compared with many countries, China’s macro The tax burden is still light. Zhu Weiqun, a professor at the School of Public Economics and Management at Shanghai University of Finance and Economics, believes that the importance of comparing macro tax burdens cannot be simply to compare numbers, but rather to compare countries where the level of public services provided by the government is close.

However, in Zhou Dewen, president of the Zhejiang Private Investment Enterprise Association, China’s macro tax burden is “very heavy” and enterprises are overwhelmed. Many small and medium-sized enterprises are on the verge of bankruptcy. He called for a direct reduction of the current corporate income tax, and the elimination of most administrative fees, to fundamentally reduce the burden on enterprises. Zhu Weiqun also believes that the government still has a lot of room for tax cuts.

Is the macro tax burden not heavy?
According to CICC's calculations, in 2014, China's generalized macro tax burden, which reflects the true burden, is the total government revenue, including general budget revenue, government fund income, total social security fund income, and state-owned capital operating income. The proportion has been as high as 37%. In general, the macro tax burden in developed countries is between 30% and 35%.

"How is the macro tax burden calculated and how it is appropriate? This is a big controversy in itself." Wang Dongsheng said that the taxation objects and taxation basis of different taxes are different. He believes that all taxes are added. It may not be a very scientific practice to derive the macro tax burden from GDP.

Wang Dongsheng pointed out that from the perspective of corporate income tax and value-added tax, China's tax burden is not very heavy. China's corporate income tax is 25%. Compared with developed countries and developing countries of similar development level, it is moderately low. Many other countries have more than 30%, and some even reach 40%. As for VAT, China’s highest tax rate is 17%, while in many European countries it is over 20%.

According to the data provided by the International Monetary Fund, France's macro tax burden in developed countries is close to 44%, in Denmark, Sweden, Norway and other countries around 40%, and Japan also reached about 38%. Compared with these countries, China's macro tax burden does not seem to be very prominent. However, Zhou Dewen believes that in the comparison of macro tax burden, China and developed countries cannot be compared.

“It is meaningless to simply compare the macro tax burdens of the two countries. The standards of the public services provided by the governments of these two countries must be close to each other.” Zhu Weiqun pointed out that although the Nordic countries such as Sweden, the value of macro tax burden Very high, but the level of public service provided by the governments of these countries is also very high. Many services are provided free of charge, so it cannot be said that the macro tax burden of these countries is very heavy.

In the eyes of many people, China’s macro tax burden is already very heavy. All along, the voices of all walks of life demanding the burden reduction for individuals and enterprises are endless. Zhou Dewen even pointed out that China's macro tax burden is not only the heaviest in developing countries, but even more important than most developed countries. China's small and medium-sized enterprises are already unbearable.

SMEs are overwhelmed
Wang Dongsheng believes that the current economic situation is indeed very serious. Many enterprises are difficult to operate, but this kind of difficulty is structural and cannot be attributed to the heavy tax burden. He told this reporter that the current production of "big road goods" enterprises is really difficult, but the days of producing high-tech products are very good; the steel and real estate industries may be very difficult, but the service industry is developing very well. .

However, Zhou Dewen does not agree with this view. He believes that "the tax burden of SMEs is far more than 37%." He said that in addition to taxation, enterprises have to bear various administrative fees, which is also a big burden. “More than 70 types of fees in more than 30 departments are on the enterprise. How can companies withstand it?”

Zhou Dewen told this reporter that the profits of small and medium-sized enterprises are very thin, and the cost has become relatively high. Especially in comparison with Southeast Asian countries such as Vietnam and Cambodia and some countries in Africa, these countries have lower costs and competitive advantages. . Under such circumstances, the burden of taxes and fees is particularly important. If the taxes and fees are high, the pressure on the survival of enterprises will increase.

"Now most of China's SMEs have a crisis." Zhou Dewen pointed out that if the government does not take measures, many SMEs will close down, which will have serious consequences. According to the data released by the National Development and Reform Commission, SMEs provide 75% of urban employment opportunities, which is the main channel for solving employment in China. If SMEs collapse on a large scale, it may trigger a massive wave of unemployment.

In recent years, the central government has been continuously introducing various measures to reduce the burden on small and medium-sized enterprises. On August 19th, the State Council executive meeting chaired by Premier Li Keqiang also decided that from October 1, 2015 to the end of 2017, the scope of small and micro enterprises that levy a half of the enterprise income tax will be taxed. The amount will be expanded to less than 300,000 yuan within the amount of 200,000 yuan, and the preferential policies for exempting value-added tax and business tax for small and micro enterprises with monthly sales of less than 30,000 yuan will be extended to the end of 2017.

"In the long run, these tax cuts, including the reform of the camp, will certainly be helpful, but in the short run, it is unlikely that the effect will be effective soon." Zhou Dewen has always called for "clearly clear" for SMEs. Local tax cuts, such as directly reducing corporate income tax. Moreover, in addition to drastically reducing taxes, most administrative fees should also be banned, because these charges are basically unreasonable.

Zhou Dewen believes that the country should "release water and raise fish" to allow enterprises to recuperate. "When they get through the storm, they will develop normally in the future, and it is okay to raise taxes appropriately," he said.

Zhu Weiqun pointed out that there is currently room for tax cuts for enterprises. Looking at whether there is room for tax cuts, the key depends on whether there is room for reduction in government spending. If government spending can be compressed, the macro tax burden can be reduced. In his view, a lot of money in government expenditures has been used in places that should not be used. Even some of the money is not used at all, and it is deposited on the treasury bill to become idle funds.

However, Zhu Weiqun pointed out that it is not easy to compress government expenditures, because once government expenditures are formed, there will be some corresponding vested interests, and cutting out these expenditures will damage the vested interests of these people, and thus Encountered resistance.

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