Reducing Tax Burden On Textile Enterprises And Reducing Cotton Cotton Yarn Price

In March 5th, the opening session of the two session of the thirteen National People's Congress was held in the Great Hall of the people in Beijing. Premier Li Keqiang made a report on the government's work, announcing the implementation of a larger scale of tax cuts, reducing both the inclusive tax and the structural tax reduction, focusing on reducing the tax burden on manufacturing and small and micro enterprises, deepening the value-added tax reform, reducing the current 16% tax rate in manufacturing and other industries to 13%, and reducing the current 10% tax rate in pportation, construction and other industries to 9%, so as to ensure a significant reduction in the tax burden on major industries.

It is reported that as China's largest tax category, the total value added tax in 2017 amounted to 5 trillion and 640 billion yuan, accounting for 39.1% of the total tax revenue.

This tax reduction is expected to further reduce the tax burden level of enterprises and individuals in China, and is expected to boost domestic demand and stimulate consumption.

The tax reduction efforts increased significantly.

In May 2018, the government had lowered the value added tax rate. At that time, the value-added tax rate fell from 17% to 16%. The value-added tax rate of goods such as pportation, construction, basic communications services and other industries and agricultural products dropped from 11% to 10%.

However, this round of tax increases will also increase the impact on the market will also increase.

Let's take textile enterprises as an example, assuming that the selling price of 1 tons of cotton yarn is about 24000 yuan / ton, then the cotton yarn without tax is adjusted to be 24000/1.16=20690 yuan / ton before the tax rate adjustment. Sales need to pay a value-added tax of 20690*16%=3310 yuan / ton. After adjustment, assuming that the sales price of cotton yarn has not changed, the cotton yarn does not contain a tax price of 24000/1.13=21239 yuan / ton after the adjustment of the tax rate, and the sales need to pay a value-added tax of 21239*13%=2761 yuan / ton, and the difference between the two is 549 yuan / ton.

For enterprises, the burden reduction is not small.

Of course, the above is only a rough calculation.

It can be seen that reducing taxes and lightening the burden will have a positive effect on the operation and profits of enterprises, and may also play a certain role in reducing the price of cotton and cotton yarns in the future.