Textile Industry Tax Burden Causes Competitiveness Decline

In this year's two sessions, "tax reduction" has become the common call of many enterprises, which is more urgent for the textile industry. During the two sessions, many representatives of the textile industry jointly called on the textile industry, especially small and micro enterprises, to survive in the complex economic situation this year. It is urgent to further deepen the reform of the circulation system of cotton (21590,10.00,0.05%) so as to lighten the tax burden for enterprises.

　 Tax burden or competitiveness decline

"As the deputy to the National People's Congress, I have made five motions on cotton issue." Sun Yingan, chairman of the National People's Congress and chairman of Hubei Xiao Mao industrial group, said. The "high tax and low deduction" of cotton purchase and processing value-added tax mentioned by him is a topic that has been continuously appealed by the whole industry for many years, but it still has little effect.

　　 cotton Cotton textile processing enterprises are the main raw materials, accounting for more than 70% of the total production cost. For a long time, cotton textile enterprises purchase tax deduction rate of 13%, while cotton textile products value-added tax rate is 17%, the difference between taxes and fees has been borne by the enterprises themselves. This means that even if no value added, cotton textile products also have to bear 4% of the tax, which will undoubtedly add to the worsening profit of textile enterprises.

"From last year to this year, the entire cotton textile industry is very difficult to be affected by the international situation and labor shortage. The profit margin of 70% enterprises is below 0.7%, which is lower than bank interest." Sun Yingan said.

In addition, cotton import slip tax policy and quota system also cause textile industry tax burden pressure. Since 2005, China has introduced a quasi tax rate for imported cotton with an additional quota of 894 thousand tons. That is to say, when importing cotton, when the price of cotton in the international market is lower than that in the domestic market, the import tax rate will be automatically raised, so that the price of imported cotton will be the same as that of domestic cotton. The textile industry is a highly market-oriented industry, and its products are priced in the international market. The implementation of sliding quasi tax makes the price difference between domestic and foreign cotton gradually widen.

In recent years, a roller coaster has appeared in China's cotton prices, and temporary storage has been started for stabilizing cotton prices. By the end of February, the state had collected nearly 2 million 700 thousand tons of cotton, accounting for nearly 40% of its annual output. Although this is beneficial to stabilizing cotton prices, it has further opened up the domestic and foreign cotton price differentials. At present, domestic cotton prices have been higher than foreign cotton prices by more than 4000 yuan, which will make China's textile industry in a very unfavorable international competition environment.

"There is no doubt that it will have an impact. A simple example shows that there was no increase in the total volume of textile exports last year. For example, the export of towels and cotton products has dropped in the US market. Who has increased? India has increased, for the simple reason that it is cheap. " Wang Tiankai, chairman of the CPPCC National Committee and chairman of the China Textile Industry Federation.

Sun Yingan also said that now the price competition of cotton products does not have international competitive advantage. After many prices are reported, the order is basically lost.

　 Enterprises shift to Southeast Asia to avoid pressure

With the recent changes in domestic and foreign market environment, slowing economic growth, increasing raw material costs, labor costs, increasing the cost of land for enterprises, increasing pressure on energy saving and emission reduction, and appreciating the RMB exchange rate, and since 2011, the state has imposed a monetary tightening policy to curb inflation, making the survival and development of textile enterprises even more difficult.

According to China Federation of textile industries According to the latest announcement, the growth rate of China's textile industry's main economic indicators slowed down last year. The number of exports and the growth of industrial profits declined particularly. The enterprises above Designated Size realized profits 295 billion 642 million yuan, an increase of 25.94% over the same period, representing a 27.6 percentage point increase over the first quarter. At present, the operating rate of Enterprises above designated size is over 80%, but the export and processing enterprises of some small and micro enterprises are more difficult. The operating rate of some industrial clusters in the PRD is only about 40%.

Under multiple pressures, according to the survey, not only a considerable proportion of international orders began to transfer to Southeast Asian countries, but also many large textile and garment enterprises in China appeared to run factories in Southeast Asia.

"Now we are more worried about the problem, because our country is in the long-term allocation of resources at different prices, there may be some enterprises to move out of the factory. The proportion of cotton in textile costs is very high, accounting for over 70%, and there is a problem of premature aging. We are not without competition, we can have competition, but because of cheap cotton, we move out. We looked at it in Southeast Asia last month, but we are not worried. Wang Tiankai said.

Sun Yingan also said that the cost of Southeast Asia is relatively low, and the wages of domestic workers are basically high. "So many of the small cotton clothing factories have been transferred, we have this idea, we have also inspected, but because we are mainly spinning and weaving at present, although it is low wages, but the efficiency is not high, so it has not moved."

Another bad news is that in March 5th, the Ministry of Commerce and industry of India issued a ban on cotton exports and decided to ban India's cotton exports from now on. At present, India is the second largest importer of cotton in China. If the ban is strictly implemented, it will have a greater impact on domestic textile enterprises. In recent years, India has become an opponent of China and other textile exporting countries in the international market, especially in terms of low-end textiles. India relies on low cost of raw materials and labor cost advantages, constantly nibbling the share of China's international market. India's move is also to improve the competitiveness of the end textiles in the international market.

　　 Delegates called for tax cuts.

The textile industry is a traditional pillar industry and an important livelihood industry in China's national economy. It is also an obvious industry with international competitive advantages. And the textile industry SMEs occupy an absolute proportion in quantity, accounting for 99% of the number of enterprises in the industry, and solve about ten million people's employment. Because the main raw material is cotton, whether the development of the industry is related to the income of cotton farmers can be improved. Once such enterprises are shut down too much, they will directly affect employment and social stability.

Many delegates suggested that the state should continue to improve this year. Structural tax cuts In the policy, we should give priority to the specific situation and practical difficulties of the cotton textile industry. We should carry out a unified tax on cotton textile industry, and deduct the cotton input from 13% to 17%, so as to make the input and output tax consistent and reduce the tax pressure of enterprises.

"We very much hope that through the reform of the circulation system, we can truly allocate the resources according to the market principle, so that enterprises can freely purchase cotton. As for how to protect the interests of farmers, I think there will be a way to do so, as long as we have discussed all these principles. " Wang Tiankai said. He suggested that we should further deepen the reform of the cotton circulation system and so on. We should focus on adjusting and improving the policy of cotton collection, storage and expansion, and gradually expanding the gap between domestic and foreign cotton prices.

Zhao Linzhong, chairman of the National People's Congress and chairman of the board of directors of Fu run Holdings Group, proposed that the tax burden of the textile industry should be lighten from three aspects. In addition to the deduction of cotton input from 13% to 17%, it is suggested that the textile industry's manual wages be allowed to be deducted when the value added tax is levied.

Sun Yingan believes that the current tax reduction conditions are already very mature. "After years of development, our country has strengthened its national strength. Last year, the tax revenue was over 10 trillion. Instead of being transferred by the state, it would be better to reduce the burden on the industry directly, so that the industry could develop itself. In addition, Premier Wen pointed out that the allocation of cake should be done well, and the incomes of residents and industrial workers should be increased. In order to raise the income of workers in this industry, it is better to directly support the industry so that the industry can solve the problem of workers themselves. "