Coal enterprises benefit most from the tax reduction of VAT

The new VAT tax reduction policy has officially landed. According to the arrangement of the government's work report in 2019, on April 1, the VAT tax rate of manufacturing and other industries will be reduced from 16% to 13%, the 10% tax rate of transportation and construction industries will be reduced to 9%; the tax rate of the first 6% will remain unchanged, but supporting measures such as increasing tax credits for production and living services will be adopted to ensure that tax burden of all industries will not increase, and the tax rate will continue to be promoted to 3%. We are moving toward a simplified tax system. After the implementation of the new policy, the coal industry with heavy VAT tax burden will benefit from it and realize burden reduction and profit increase.

Coal industry calls for "reducing burdens"

Coal as an important basic energy in China, which plays an important role in ensuring energy security and promoting social and economic development. While making important contributions to national finance, the coal industry itself bears a heavy tax burden. According to incomplete statistics, the current coal industry involves more than 30 kinds of taxes, including not only value-added tax, income tax and resource tax, but also special taxes such as urban maintenance and construction tax, education fee surcharge, local education surcharge and river engineering maintenance fee. It also needs to pay property tax, vehicle and ship use tax, land use tax. In addition, local financial departments also collect transfer funds from coal enterprises. There are more than ten taxes and fees, such as social public welfare fees, sewage discharge fees, land reclamation fees, environmental governance bond and mine rehabilitation bond. There are many tax and fee items in the coal industry, and the actual tax burden is obviously higher than the national average because of the particularity of the industry. Take value-added tax as an example, the enterprise should pay value-added tax equal to the enterprise's sales tax minus the input tax. Income tax refers to the value-added tax paid or borne by taxpayers for purchasing goods or receiving processing, repairing and repairing services and taxable services. Sales tax refers to the value-added tax calculated according to sales and value-added tax rates when taxpayers provide taxable services. A coal expert in the industry told us in an interview with our reporter, "Coal mining and dressing industry is in the upstream of the industrial chain, with less input tax in the operation of enterprises. Mining right price, land subsidence compensation fee, land expropriation and relocation fee, loan interest, etc., which constitute input cost, can not obtain special invoices for VAT. Therefore, the actual VAT tax burden of coal industry is higher than that of general industrial enterprises 2. About a percentage point." In recent years, the voice of the coal industry on tax reduction and fee clearance has been unabated. On the one hand, after the end of the "Golden Decade", the coal industry lost a lot of money, but the tax burden did not decrease. On the other hand, the coal industry has a long construction cycle, large investment and high fixed cost. Faced with the severe market environment, coal enterprises urgently need to strengthen management and control. Thirdly, the social functions of the historical coal enterprises, as well as the personnel placement and enterprise transformation under the background of capacity removal. Problems have further aggravated the burden on coal enterprises. Therefore, the coal industry calls for sorting out the coal tax and fee system, adjusting the tax and fee structure, canceling or revising duplicate fees and unreasonable fee items, reducing tax and fee payment standards, increasing tax and fee deduction scope, lightening the burden of coal enterprises and increasing profits of enterprises.

The degree of tax reduction in coal industry exceeded the expectation

Starting from 2009, the value-added tax rate of the coal industry has undergone three adjustments: before 2009, the value-added tax rate of coal was implemented at 13%, and new regulations were issued in 2009, which restored the value-added tax rate of metal mining and mineral processing products, including coal, from 13% to 17%; on May 1, 2018, the value-added tax rate of non-metal mining and mineral processing products was adjusted again to 16%; on April 1, this year, the third adjustment began, from 16% to 13%. From the point of view of trend, the trend of VAT tax rate reduction is obvious, and the pace is growing. The tax reduction measures have been welcomed by the coal industry. On April 2, the China Coal Industry Association organized a symposium on some coal enterprises. The coal enterprises attending the symposium praised this round of tax reduction measures, saying that the degree of tax reduction was somewhat beyond expectations. The above-mentioned coal experts predict that after the reduction of VAT tax rate, coal enterprises will enjoy a reduction in taxes and fees and an increase in benefits. "Assuming that the output and price of coal remain the same as the same period last year, the average tax burden of coal enterprises will be reduced by 2 percentage points, and the profits of Enterprises above the scale will increase by hundreds of millions of yuan." According to the calculation made by Yongan Futures Research Center recently, if the cost of coal production per ton is about 110 CNY/ton, assuming that the tax price of coal sales is 350 CNY/ton, and the tax rate before adjustment is 16%, the tax amount of coal enterprises should be paid off is 48.28 yuan, the tax amount of deductible input is zero (the cost of raw materials can be neglected), the actual sales profit is 191.72 yuan, and the tax rate after adjustment is 13%. Calculated, the amount of tax payable by coal enterprises has been changed to 40.27 yuan, while the sales profit has been 199.73 yuan, and the profit has increased by 4.2%.

Although the coal industry is not satisfied in deducting input tax, the policy focus of this tax reform is to reduce the value-added tax rate, which is the most important for the coal industry to achieve higher income, and also the most conducive to the downstream industry.

According to the business data published by Shenhua in 2018, China's coal industry realized profit of 288.82 billion yuan in 2018 and China's Shenhua realized net profit of 43.867 billion yuan in 2018. According to the 4.2% profit growth rate mentioned above, the profit growth of the coal industry may reach 12.13 billion yuan, and that of China Shenhua may reach 1.84 billion yuan. It can be seen from this that the reduction of VAT will bring huge dividends to the coal industry. Of course, how much tax reduction dividends can coal enterprises enjoy, the follow-up needs to observe the bargaining power of the industry upstream and downstream.