Cancel the tire consumption tax--be favorable for the development of the industry
China rubber network
In November 25th, the Ministry of Finance & the State Administration of Taxation issued the "notice on the adjustment of consumption tax policy" (tax / 2014 / 93). The abolition of the automobile tire items, was onwards since December 1st, 2014. Chinese Rubber Industry Association has called "to cancel the bias tire and motorcycle tire consumption tax" for 21 years and finally owned results, which caused the tire industry sector stocks rose. Undoubtedly, this is also benefit for the tire industry under the blow of USA car & light card tire double reverse, and composite rubber & standard rubber content downing.
"In the transition from planned economy to market economy, consumption tax policy, does not adapt the open market economy any longer. To bias tire consumption tax is unreasonable. Otherwise, canceling the bias tire consumption tax of 3%, is conducive to the tire enterprises to increase self accumulation and technological transformation, to improve the ability to resist risks." China Rubber Industry Association tire branch’s former Secretary General, Weimin Cai said, "Although the current bias tire production has been very low, there is still a demand in a particular market. Limited to the tire structure, operating environment and customer demand, meridional tire also cannot replace bias tire, especially for agriculture and forestry machinery tires, industrial vehicle tyres, special vehicle tire (mainly military tires) etc.. So, some well-known tire enterprises in China have also reserved the bias tire products."
According to the statistics of China Rubber Industry Association, in 2013, among 48 tire member enterprises, there were 26 enterprises produce bias tires, and the annual output was up to 39,430,000. In the first 10 months of 2014, production reached about 34,790,000.
Weimin Cai said, in 2001, our country canceled the radial tire consumption tax, alleviating burdens on the development of radial tire and after that ushering the rapid development of radial tire, even laying the foundation for China to become world tire power. Although the proportion of bias tire production is far below the radial tire, in specific industries and specific uses, bias tire is still indispensable. Due to the high performance green tire radial tire has become the development direction of the industry, enterprises canceled the bias tire consumption tax, will no longer blindly develop bias tires, which will be benefit for the enterprise to upgrade technology, improve product quality and performance of bias tire.
It is reported that, the abolition of the consumption tax, also brought good news to the tire industry’s stock market. In the Shanghai and Shenzhen of two markets, in addition to double the money stock in December 1st for planning major issues of suspension, S fell 1.48%, Giti Sailun (No bias tire products) fell 0.97%, in December 1st, the other 3 stocks are up more than 2%, including Fengshen shares rose 2.60%; Qingdao double star rose 2.36%; Guizhou tire A rose 2.27% at last.
On the news of abolishing motorcycle tires consumption tax, a lot of enterprises called consultation. “we are dragged down by the tire industry for more than 20 years, now finally results." Secretary general of China Rubber Industry Association of tyre branch, Canguang Yang said, "over the past 20 years, the association actively reflected the industry demand many times to the relevant departments of the state, reported to the State Administration of Taxation and the Ministry of finance to cancel the motorcycle tire consumption tax." Canguang Yang introduced, nearly two years, three wheeled and four wheeled motorcycle, electric vehicles are the market popular varieties, widely welcomed by farmers, as supporting the tire number and new specifications are in growing demand, which is expected the next few years to maintain the supply and demand booming situation. In addition, leisure and entertainment products, such as the playground playing cars, scooters, ATV, karting, lawn mowers and other small all terrain vehicle tires, and sport bicycle tires and other new products have become the new darling of the vast number of consumers. But as these products have to pay consumption tax that is not unified, it has brought pressure and confusion to the enterprise, even caused the unfair market.
As known that, in 2007, the State Administration of Taxation in Guoshuihan 723 file, gave a reply to small all terrain vehicle tire levy consumption tax issue. Speed of scooter, ATV, karting and other small all terrain vehicle is low. They are without license, not allowed to run on the road, different from the general sense of the automobile or other motor vehicles, with tyres researched and produced according to the diameter wheel agricultural tyre standards and production process. For this type of tires, if universal with other motor vehicles, they should be consumpted taxes. If not general with the car or other vehicles, they do not belong to the scope of consumption tax levy. Canguang Yang said, due to the absence of a small all terrain tyres national standards, there are no uniform standards for the implementation of the approved provinces of operation. so the emergence of small all terrain vehicle tire consumption tax implementation exists, some provinces tax, some provinces do no tax.
Canguang Yang said, the abolition of the consumption tax is not only beneficial to force the tire industry upgrade and structure adjustment, but also, because of the provinces also disappeared small all terrain vehicle tire consumption tax, the tires with fair competition development contributes to the market and recreational products.
The personage inside course of study believed, although the abolition of the consumption tax (including motorcycle tire tire product) output value accounted for a small proportion in the whole industry, these products are essential for domain specific and market specific products, facing the need to further upgrade the products. Therefore, the abolition of the consumption tax can improve the quality and performance of these products, make it better for specific application service, and further achieve energy saving and emission reduction.
Automobile tire consumption tax evolution history
1. In January 1st, 1994, a first consumption tax
The State Council promulgated the "Provisional Regulations of the people's Republic of China on consumption tax” (State Council Order No. 539th) in December 13th, 1993. The Ministry of Finance, in December 25th, 1993, promulgated the "implementation of the Interim Regulations of the people's Republic of consumption tax rules", and in January 1st, 1994, the automobile tire consumption tax levy was on, with the tax rate of 10%.
The tax collection scope is used for a variety of vehicles, trailers and special vehicles and other motor vehicles on the inner and outer tyre. Tax collection scope includes: (1) the light passenger car tire; (2) truck and bus, trolleybus tire; (3) the tire with the mining, construction and other vehicles; (4) tires with special vehicles (referring to travel on no pavement or snow, desert and other high off-road tires); (5) motorcycle tire; (6) various trailers tyres; (7) engineering tyre; (8) other vehicle tire; (9) the automobile and farm tractors, harvesters, tractors general tire.
2. Since 2001, screwdriver radial tire were exempted from the consumption tax
In December 28th, 2000, the Ministry of Finance and the State Administration of Taxation jointly issued the "notice on the adjustment of the automobile tire consumption tax policy" (tax (2000) No. 145). Since 2001 January 1st, the "car tyres in radial tire" tax exempted from the consumption tax, consumption tax to stop retreading tire, other tire consumption tax levied at the rate of 10%
3. In April 1st, 2006, bias tire consumption tax was cutted the tax rate from 10% to 3%
In March 20th, 2006, the Ministry of finance and the State Administration of Taxation issued the "Circular on adjusting and Perfecting Consumption Tax Policies" (tax 33). Since April 1st, 2006, bias tire consumption tax was cutted the tax rate from 10% to 3%.
4. In December 1st, 2010, farm tractors, harvesters and tractors for tires were no longer imposed consumption tax
In October 19th, 2010, the State Administration of Taxation issued "on the farm tractors, harvesters and tractor tire levy special consumption tax issue notice" (2010 sixteenth announcement), agricultural tractors, harvesters and tractors special tire do not belong to the "Interim Regulations of the people's Republic of consumption tax" (State Council Order No. 539th) regulations subjected to consumption tax "tire" range, and do not imposed consumption tax, entered into force in december 1st, 2010.