Xie Xuezhi Calls for Comprehensive Enhancement of Goods and Service Tax Administration at the National Tax Conference

Recently, the video conference of the national taxation system on the administration of goods and service tax was held by the State Administration of Taxation (SAT). Xie Xuezhi, deputy administrator of the SAT, emphasized on the conference that the tax authorities shall comply with the requirements of goods and service tax administration in perfecting tax systems, strengthening tax administration, optimizing tax services and improving their style of work, with an aim to comprehensively enhance the administration of goods and service tax.
　　According to the conference, the collection of revenue continues to serve as the top priority of tax administration. As stressed by Xie Xuezhi, in 2010, the contradiction is obvious between fiscal revenue and expenditure, with great challenges in the collection of tax revenues. Some structural tax abatement policies have been institutionalized; the possibility of tax increment through one-off provision of policies has ceased to exist; there is no great potential for the growth of revenue from consumption tax levied on fuel oil, cigarette, etc as compared with that in 2009; the tax credit of VAT transformation needs to be further utilized by enterprises. Xie Xuezhi requires that tax authorities shall attach great importance to the collection of revenues, adhere to the principle of "collecting in full amount tax liabilities in accordance with law, never collecting excessive amount of tax revenue, preventing and checking tax relief in excess of authority", enhance the analysis and predication of tax revenues, deeply carry out the comparative analysis of economy and taxation, identify the loopholes of tax collection and administration, check tax evasion and increase revenues by targeting specific groups, and ensure the steady growth of goods and service tax revenue with growth of economy.
　　Goods and service tax consists of four tax categories, i.e., VAT, consumption tax, business tax, and vehicle purchase tax, in addition to tax collection from import and export. Currently the revenues from goods and service tax account for over 60% of total tax revenues of the country. In 2009, revenue from the above four tax categories reached a total of RMB4150.7 billion, an increase of 13 percent over the 2008 level, accounting for 65.8 percent of total tax revenues. The export rebate in 2009 reached up to RMB648.7 billion, a rise of 10.6 percent year-on-year. According to statistics from the SAT, in 2009, the deduction of input VAT for the purchase of machinery equipment by general taxpayers reached RMB141.6 billion, which has effectively reduced the investment burdens of enterprises. The tax rates for small-scale taxpayers of VAT have been reduced, which relieved the tax burdens of small enterprises by approximately RMB15.3 billion. In 2009, the reform of taxation expenses for refined oil was implemented, in which the unit standard tax amount of consumption tax levied on refined oil was increased. The revenue collected from domestic consumption tax reached RMB476.1 billion in 2009, representing an increase of RMB219.3 as compared to that in 2008. Of the increment, RMB163 billion was collected thanks to the provision of tax increment policies, accounting for 74.4 percent of total increment of revenue from consumption tax.
　　In terms of VAT, the legislation of VAT has been included in the legislation plan of the State Council this year, and will be submitted to the Standing Committee of the National People's Congress for consideration. Xie Xuezhi requires that tax authorities at all levels shall make full preparations for the legislation of VAT in active coordination with the SAT, orchestrate the estimation of all kinds of legislation planning, listen to suggestions on VAT reform from all stakeholders, so as to make the legislation a process of transforming concepts and unifying thoughts and to lay a solid foundation for the smooth implementation of VAT law. Tax authorities all at levels shall continue to put into practice the measures for VAT transformation, implement the reform of VAT of farm produce, standardize the deduction of input VAT for farm produce, research effective approaches to establishing the mechanism for VAT payment assessment, perfect the administration measures for tax reimbursement after assessment for enterprises that are subject to the preferential policy of reimbursing tax rightly after tax collection, strive for the comprehensive implementation of the administration measures for "conducting comparison before tax deduction" for Customs covering warrant within this year, carry out the Measures for the Administration of Recognition of General Taxpayers, earnestly fulfill responsibilities for VAT administration work such as the printing and distribution of plain invoices, and do a good job for the assessment of routine VAT payments.
　　In terms of consumption tax, Xie Xuezhi requires that tax authorities shall deepen the reform of taxation expense for refined oil, study the implementation scheme for shifting the taxpaying aspect of consumption tax for refined oil to the aspect of wholesale, study and formulate the Measures for the Collection and Administration of Consumption Tax for Refined Oil, research and perfect policies for consumption tax, appropriately expand the scope for the collection of consumption tax, amend and perfect the Measures for the Administration of Verification of Taxable Value of Consumption Tax for White Spirit and the Measures for the Administration of Information Collection and Verification for Taxable Value of Consumption Tax for Cigarette, and enhance the administration of consumption tax of key industries such as white spirit, cigarette and refined oil.
　　In terms of business tax, Xie Xuezhi requires that tax authorities shall earnestly implement the policy on the collection of business tax for individual transfer of housing, specify the standards for the classification of taxable behaviours for business tax both at home and abroad and the policy for the collection of business tax for the trading of financial products by non-financial institutions, and research and formulate the Measures for the Administration of Collection of Business Tax Based on Difference, in an effort to fill the gap in relevant systems at an earliest date. All tax authorities shall continue to enhance the "comparison between invoices and forms" concerning business tax of feight industry and its comparison with revenue from income tax, effectively prevent and check the false issuance of freight invoices, further implement the measures for the administration of business tax items and the use of invoices for construction industry and real estate industry, strengthen the administration of major tax sources of business tax, and enhance the administration of invoice issuing taxpayers of feight industry.
　　In terms of vehicle purchase tax, Xie Xuezhi requires that tax authorities shall research the policy for vehicle purchase tax collection of motorcycles and farm vehicles, amend and perfect the Measures for the Administration of Vehicle Purchase Tax Collection, enhance the quality of administration, perfect the information system for the collection and administration of vehicle purchase tax, expand the scope of pilot operation of e-administration of archives of tax collection and administration, standardize the measures for the e-declaration of vehicle purchase tax, increase the efficiency of tax collection and administration, implement the inspections of vehicle purchase tax, join hands with relevant departments to crack down on tax evasion and vehicle licensing through deception by use of false duty paid proof of vehicle purchase tax, promote the application of POS machine for tax payment by card swiping, and tighten the administration of tax payment in cash.
　　In terms of import and export tax, Xie Xuezhi requires that tax authorities shall further perfect the policies for import and export tax, optimize the structure of export rebate rates, continue to push forward the informatization of tax reimbursement for import and export, perfect the data sharing between export rebates system and the comprehensive tax collection and administration system, carry forward the networking of tax authorities, the national treasury and commercial banks for export rebate, strengthen the networking of electronic data with the Customs for processing trade, establish the national information base for special attention of tax rebate verification in export, actively carry out the early warning and assessment of export rebates, explore the establishment of the early warning indicator system for export rebates, tighten the routine examination and verification of export rebates, further increase the efficiency of examination and verification, handle export rebates in a timely and accurate manner, and exert great efforts to prevent and crack down on the fraud of export rebates.
　　Xie Xuezhi emphasizes that tax authorities at all levels shall comprehend correctly the situation and tasks for the administration of goods and service tax, adapt to the requirements for the transformation of economic development mode, give full play to the functional role of goods and service tax, grasp the priorities of policy regulation, the inherent law of goods and service tax system and the stimulus of policy regulation, and attach importance to the facilitation of structural adjustment, the optimization of tax systems and the acceleration of development.