Great benefit! Li Keqiang Announces Manufacturing Value Added Tax Lowers to 13% Energy Equipment and Other Industries Will Benefit

Great benefit! Li Keqiang Announces Manufacturing Value Added Tax Lowers to 13% Energy Equipment and Other Industries Will Benefit

2019-03-08 11:39

Source: wildebeest energy
According to Xinhua News Agency, in the government work report on March 5, Premier Li Keqiang of the State Council proposed to implement a larger tax cut.  Both inclusive tax cuts and structural tax cuts will focus on reducing the tax burden on manufacturing and small and micro enterprises.
The report pointed out that the VAT reform should be deepened to reduce the current 16% tax rate in manufacturing and other industries to 13%, and the current 10% tax rate in transportation, construction and other industries to 9%, so as to ensure a significant reduction in tax burden in major industries.  The 6% tax rate will remain unchanged.
However, by adopting supporting measures such as increasing tax deduction for production and living service industries, we will ensure that the tax burden in all industries will only decrease but not increase, and continue to move forward in the direction of promoting three-tier and two-tier tax rates and simplifying the tax system.  We will implement the inclusive tax reduction policy for small and micro enterprises introduced at the beginning of this year.
The report pointed out that this tax cut, focusing on "draining water to raise fish", enhancing development potential and considering financial sustainability, is a major measure to reduce the burden on enterprises and stimulate market vitality, an important reform to improve the tax system and optimize the pattern of income distribution, and a major choice for macro policies to support steady growth, ensure employment and adjust the structure.
The equipment manufacturing industry in various sub-markets in the energy field-petroleum and petrochemical, coal, electric power, new energy and other fields has a trillion-level market scale.

This tax reduction will be conducive to the transformation and upgrading of the energy and equipment manufacturing industry.
Taking wind power as an example, an analysis by CIC's consultancy industry research center pointed out that in 2017, China's offshore wind power installed capacity increased by 1.16 million kilowatts, with a cumulative installed capacity of 2.79 million kilowatts.
The agency predicts that China's offshore wind power installed capacity will reach 4.23 million kilowatts in 2019, with an average compound annual growth rate of 26.02% in the next five years (2019-2023) and 10.67 million kilowatts in 2023.
In recent years, the rapid development of offshore wind power alone is expected to drive China to form a trillion-yuan scale offshore high-end equipment manufacturing industrial cluster.

In the photovoltaic market of global solar, China ranks first in the world in the level of photovoltaic manufacturing.
Data show that by the end of December 2018, China's photovoltaic power generation capacity had reached 174 million kilowatts.  Among them, the centralized power station is 123.84 million kilowatts and the distributed photovoltaic is 50.61 million kilowatts.
According to institutional analysis, it is expected that the total installed capacity of China's photovoltaic industry will be 40GW-50GW in 2019.
Photovoltaic industry is an industry that pays more attention to initial investment than operating cost.
At present, in general large-scale ground power station projects, the equipment cost accounts for about 80% of the total initial investment;  Construction engineering services account for about 13% of the total initial investment.
If this tax reduction policy is implemented, the cost of photovoltaic equipment manufacturing will drop, which will promote the early realization of affordable Internet access.


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