To hand in taxes according to laws is a quite natural thing, but some in charge of logistics enterprises are thinking that several items are taxed unreasonably.
Taxes far higher than profi ts
The company charges 402 yuan to deliver four lamps worth 740 yuan each from the Chengshi Zhixing Logistics Center in Guangzhou. In this case, the company can earn 12 yuan but has to turn in 39 yuan for taxes, says Shen Huawei, the accountant of the company.
The president of the company Huang Aijuan says there are four categories of tax they turn in: business tax takes up 12 yuan, urban construction tax 8.4 yuan, education surtax 3.6 yuan, and enterprise income tax 10 yuan which is 10% of the pre-tax profi t of the company. But the reporter notices here all the taxes put together should be 34 yuan, while the company really turns in 39 yuan.
T at 34 yuan turns into 39 yuan results from repeated taxation. The goods travel 2,200 kilometers from Guangzhou to Laiwu, and the com- pany has been taxed for the 402 yuan, the transportation charge. But after the goods enter Shandong Province, they have to be delivered to their destination by the company’s subsidiaries, which have to turn in taxes to their respective local governments for the transportation of the goods as independent legal persons.
Huang Aijuan tells the reporter that a logistics company usually has a number of subsidiaries and divisions all over the country. Generally, goods have to be transferred to many subsidiaries before they reach their destination, but every transfer is taxed. Judging from a single delivery, the extra 5 yuan in this single case seems meager, but the company has more than 200 branches nationwide, with thousands of routes in operation. As a result, it takes the company nearly a million yuan to cover the repeated taxation. The extra costs at least increase the transportation fee by 10%, with the consumers being the real victims.
Secretary of Guangzhou Logistics Association Zhang Qiang tells the reporter that for the time being,
the four tax category—turnover tax, ncome tax, property tax and action tax—constitute China’s current taxation mechanism. In every category, dozens of taxes are concerned with the ogistics industry. Repeated taxation mainly happens in outsourcing. The average gross profi t rate for this industry has slumped from 30% in 2002 to the current less than 10%, with the figure for enterprises providing storage being only 3% to 5%, for those engaged in transportation, only 2% to 3%, and for truck transportation, freight agency and general logistics service, about 2% on average. Repeated taxation is the camel’s last straw on the low-profi t logistics industry.
This same happens in the storage. Li Jianming rents a warehouse by 240,000 yuan and leases to someone else at 600,000 yuan. But he has to turn in 85,000 yuan monthly, of which 40,000 yuan is the extra incurred by repeated taxation.
Experts hold that all these have happened because in our country there is still not a specifi c and precise positioning of the logistics industry. Related taxes are miscellaneous and in disorder. Repeated taxation happens everywhere. This places the combined transportation under great pressure.
When will tax reform have an ice-breaking?
Gui Shouping, a standing member of China Society of Logistics, mentioned in his research that, the transportation combining waterway and road, highway and railway has been the most infested with repeated taxation. Gui said, “In this respect, we should coordinate the tax departments in diff erent regions, levy taxes by sections with only a single tax bill, and make it clear how much tax should be levied for every section.” He explained that the current online and integrated operation is the basic pattern for logistics enterprises. But according to the current taxation policies, every outsourcing is taxed and filed a tax bill. T e more specifi c the labor division is, the more transactions are conducted, and the more tax will be levied.
Sun Jianbo, Vice President of Institute of Finance and Tax Laws under Beijing Law Society, suggests,“To thoroughly solve the problem of repeated taxation during the levy of business tax, the best way is to incorporate it into the value-added tax. In this way, the sub-categories in the business tax will be offset by similar items in the value-added tax. Naturally, taxes will not be collected repeatedly. ” He explained that while giving priority to the consumption VAT, they gradually turn the business tax into VAT. When both taxes are levied, tax rate should be made the same for all trades, the preferential treatment in VAT should be granted more cautiously, and the business tax should apply the taxation principle for VAT, with differences being taxed, so that they can eliminate repeated taxation.
This idea echoes with the proposal of He Dengcai, Vice Director of China Society of Logistics. He said,“We have also reported to the National Development and Reform Commission, the State Administration of Taxation and the Ministry of Finance. Generally speaking, the problem of repeated taxation can be solved by turning the business tax into the valueadded tax.”