China's tax burden "bullies" small and medium-sized enterprises, making innovation and entrepreneurship hard to release

Source: on April 24, 2014, forbes.com, the tax burden is painful How deep is the pain? Maybe the current Chinese small and medium-sized enterprise owners feel the most The Asia Pacific edition of Forbes magazine once published the ranking of "tax pain index" every year The tax pain index of mainland China once ranked second in the list of 50 countries or regions, next to the highest France The calculation method of the index is to sum up the highest legal tax rates of corporate income tax, personal income tax, property tax, employer social insurance, employee social insurance and value-added tax (or sales tax), and then to get the tax burden pain index to rank This list has attracted wide attention and even caused controversy between the government and the public At the Forbes China potential enterprise forum held on March 26, China Everbright Bank and the National Accounting Institute jointly released the report on the development of small and medium-sized enterprise tax: Tax and enterprise growth According to the proportion of taxes paid by enterprises to the pre tax profit, we can see that in the new three boards dominated by small and medium-sized enterprises, the comprehensive tax burden of enterprises reached 138.89% in 2012 It shows that the taxes paid by the enterprises (calculated by cash flow) are much higher than the pre tax profits of the enterprises, and the comprehensive tax burden of the new third board is much higher than that of the large-scale growth enterprise board (71.70%) and the main board (120.45%) From the perspective of gem, from 2010 to 2012, the company's comprehensive tax burden rose sharply by 20 percentage points, indicating that the burden of small and medium-sized enterprises gradually increased Please note that the enterprises with the heaviest tax burden and the fastest rising tax burden in recent years are the innovation elites in China's small and medium-sized enterprises Another research result, once again confirmed that the tax compliance cost of Chinese enterprises is regressive, that is, the smaller the enterprise scale, the higher the tax compliance cost of unit sales The so-called compliance cost refers to the time and monetary cost that the taxpayer spends in order to pay taxes according to law The monetary cost includes the salary paid to the tax declaration personnel, the expenses of the third-party intermediary tax agent and the amount paid to purchase the tax declaration equipment It refers to the extra cost that the taxpayer pays after paying taxes on real money, which is completely consumed for the enterprise and social resources In fact, China's tax burden, whether in individuals or enterprises, is regressive, that is, the more low-income people, the more small and medium-sized enterprises, the heavier the tax burden they bear Taking into account the majority of low-income people and small and medium-sized enterprises in the whole society, the current tax system not only does not play a fair role, but also aggravates the unfairness, thus amplifying the pain of tax burden But what Chinese entrepreneurs, entrepreneurs and investors criticize most is not the tax rate, but the opacity and inconsistency of China's tax system, which constitute a heavy part of corporate tax burden An investor in the direct investment department of an international investment bank told me: the interpretation of the tax law is not clear in many places, and there are different policies in different places, so the cost of compliance is very high Under such a tax system, the more serious you are in compliance with the law, the more complex your questions are, the more unanswered you are, and the higher the cost of regulation and the space for rent-seeking An investor from Hong Kong told me that one of Hong Kong's biggest attractions for Industry and commerce is the simple and transparent low tax rate: enterprises only pay income tax, not exchange to transfer tax; small and medium-sized enterprises have low tax rate, and large enterprises have high tax rate, which is progressive He has invested in enterprises in mainland China for many years, and he is also used to several books for many unlisted enterprises: one for the tax bureau, one for banks or investors when financing, and one for himself In order to survive, many enterprises have to find ways An old manager of the original country's enterprises who converted to investment told me that the bullied are all small and medium-sized enterprises, and the poorer the place, the higher the actual tax on small and medium-sized enterprises In China, there is a lack of third-party services for small and medium-sized enterprises As a result, the cost of compliance is too high, and people do not comply "China has the heaviest tax burden, so tax evasion is the most serious," said one returnee entrepreneur In fact, it is clear that such a high tax rate cannot be collected in practice, and causes a wide range of tax evasion and tax evasion Why not consider reducing taxes for small and medium-sized enterprises and establishing a transparent tax system, and focus on strict implementation? Although the government is pushing forward the reform of business tax to value-added tax to reduce the turnover tax rate of enterprises, some enterprises feel that the tax burden will increase instead of decreasing in the implementation The drafter of the report, Professor Li Xuhong of the National Accounting Institute, told me: it is more important to simplify the tax system There is a supply school in economics that tells us that tax reduction can stimulate the growth of enterprises, expand tax sources, and eventually collect more taxes In fact, it's needless to say that entrepreneurs say that if you reduce the tax rate and make the tax system transparent, everyone will pay taxes according to law, not only what should be collected will be collected, but also the cost of tax collection and management will be reduced, and the government will receive more net income when calculating accounts The tax burden of small and medium-sized enterprises is heavy, which is not unique to China But in recent years, the business environment of small and medium-sized enterprises in China has deteriorated, such as the rapid rise of enterprise labor costs, the deterioration of export environment, and so on The giants of enterprises grow up from innovative small and medium-sized enterprises In recent years, a wave of entrepreneurship has sprung up in China If the tax system can improve and reduce tax rates and reduce the tax burden of small and medium-sized enterprises, the growth space and innovation vitality of small and medium-sized enterprises can be protected and released under the background of the declining trend of China's economic growth, and the economic transformation price is smaller.