The picture shows Yantai Wanhua Industrial Group Co., Ltd. using straw made of furniture plates. (Photograph by Ma Shougui, our reporter)
On November 21st, the Ministry of Finance and the State Administration of Taxation jointly issued the Notice on Adjusting and Perfecting the VAT Policy for Comprehensive Utilization of Resources and Labor Services (Caihe [2011] No. 115, hereinafter referred to as No. 115). Dozens of agricultural, industrial, household waste, and garbage utilization are subject to VAT reductions. As the country's policy of encouraging the comprehensive utilization of resources involving the most extensive scope and the greatest degree of reduction and exemption, the publication of Document No. 115 has attracted extensive attention from companies, especially chemical companies with huge potential for comprehensive utilization of resources.
In recent years, there has been increasing calls for tax cuts by companies that are overtaxed. The tone, direction, and main tasks of China's macroeconomic policy in the just-concluded Central Economic Work Conference will be clearly "steady progress." More knowledgeable people suggest that to maintain economic stability, tax reductions should be started. At the end of the year, real tax cuts really began, and it began with the comprehensive use of resources.
Doubled tax-reduction products It is understood that as early as December 2008, the Ministry of Finance and the State Administration of Taxation issued the “Notice on Comprehensive Utilization of Resources and Value-added Tax Policies for Other Products†(Cai Shui [2008] No. 156, hereinafter referred to as 156 No.) The minimum 50% VAT concession is granted to enterprises with comprehensive utilization of resources such as industrial waste, exhaust gas, used tires, and coal gangue as raw materials. Three years later, the re-issued Document No. 115 of the two departments expanded the scope of the beneficiary products, and simultaneously increased the threshold for enterprises to benefit.
The reporter found that in terms of scope, the product category covered by Document No. 115 has more than doubled over 2008.
First of all, in the category of exemption of value-added tax, the new plan added a product such as building sand aggregate produced from construction waste and coal gangue as raw materials. At the same time, on the basis of originally exempting VAT on sewage treatment services, the new regulations also include waste treatment, sludge treatment and disposal services, etc., within the scope of exemption.
Secondly, the list of preferential services that enjoy the full value-added tax is immediately increased. In addition to the five categories of high-concentration carbon dioxide and waste-to-energy generated by industrial exhaust gas, seven types of industrial waste heat power generation, biomass power generation, and sludge fuel production have been added.
Once again, the 50% VAT rebate offer list is more than twice as original. On the basis of the original, it added the comprehensive utilization of waste plastics, waste polyvinyl chloride, and waste rubber products, graphite produced from waste graphite as raw material, and 8 types of industries such as lead metal using waste batteries as raw materials, and enjoyed half value after adjustment. The list of sales of self-produced goods where the tax is paid off is increased to 14 categories.
In addition, the new program also added a preferential tax rate, which stipulates that if the sale of three types of agricultural and forestry residues such as three surpluses, second-smallest fuel wood, and crop straw is used as a raw material to produce related products, 80% of the value-added tax will be refunded.
While expanding the scope, the policy further clarifies the requirements for enjoying tax-reduced products, and it is more inclined to support the formal integrated utilization of comprehensive utilization technologies. For example, a waste plastics comprehensive utilization enterprise that enjoys a 50% preferential tax refund policy must pass the ISO9000 and ISO14000 certification; the production enterprises that use the oil sludge (scum) produced in the oil field production process must obtain “dangerâ€. Integrated Waste Management License etc. For lead recycling companies, it is clearer that the target of VAT rebates is changed from the original recycling enterprise to a company that comprehensively uses hazardous waste. The company's qualifications must also obtain the “Hazardous Waste Comprehensive Operation Permitâ€.
In May of this year, Qingdao Petrochemical Technology Co., Ltd. and China Petroleum University (East China) jointly established the Qingdao Petrochemical “Three Wastes†Utilization Engineering Technology Research Center and was unveiled. (For CFP)
The environmental protection enterprises’ clap reporters noted that in the new policy, the VAT-reduced resource utilization industry has increased the number of new biomass energy industries that include fuels such as food waste, animal manure, and corn cob, as well as new biomass energy industries. The use of waste plastics to produce recycled plastic traditional environmental protection industry, in addition to oil sludge, coal gangue, used batteries, waste photosensitive materials, waste color developer, waste catalysts and other more than 20 kinds of chemical waste treatment industry. Many companies and industry leaders heard about the policy and clapping.
“This is the best Christmas gift given to us in the recycled plastics industry. I am very happy to see this policy.†Lin Dongliang, chairman of the China Plastics Industry Association Plastics Recycling Specialist Committee, was particularly excited when interviewed. According to him, about 60 million tons of China's 60 million tons of plastic products are made from recycled plastics each year, but recycled plastics companies have been relying on low-intensity production. The promulgation of this policy is in the snow. “I have 3 recycled plastics factories, and the annual profit rate is only 3%. This policy mentioned that we must implement 50% discount on VAT rebates for recycled plastics enterprises. With the current 17% VAT rate, we can The amount of tax rebate enjoyed is several million yuan, which is more than our one-year profit!†Lin Dongliang smiled.
Lin Dongliang also favored setting a benefit threshold. In his view, companies must pass ISO9000, ISO14000 certification terms are expected to optimize the pattern of enterprises in the recycled plastics industry. “At present, we have a strange phenomenon in the recycled plastics industry: The bigger the company, the harder it is because the industry’s large number of small, undocumented and non-compliant workshops compete with formal enterprises at the expense of the environment. At present, the output value of small workshop companies in our industry It accounts for more than 60% of the total output value of the entire recycled plastics industry. If the threshold is set, the proportion of the output value of large enterprises in the recycled plastics industry may increase in the future,†said Lin Dongliang.
In the category of products with a VAT levy of 50%, the use of coal gangue as raw material to produce alumina and waste rubber products as raw materials for the manufacture of gasoline, diesel and rubber oil are also included. It is understood that the annual output of coal gangue and waste rubber in China is huge, but the utilization rate is very low. According to statistics, the annual coal gangue emissions in the country amount to about 380 million tons. Currently, there are more than 1,500 coal gangues, which totals more than 5 billion tons. According to Chang Xiaogang, chairman of Shanxi International Power Corporation, only one province in Shanxi will generate 750 million tons of coal gangue during the 12th Five-Year Plan period. According to data provided by the China Rubber Industry Association, China's current annual waste rubber production is not less than 15 million tons, but the actual processing volume is less than 500 tons. The companies and experts interviewed by the reporter believe that this policy is expected to promote the recycling of coal gangue and waste rubber.
Sun Shuanghu, chairman of Shanxi Yuncheng Aoxin Nanotechnology Co., Ltd., has been engaged in coal gangue utilization for nearly 30 years. According to him, coal gangue made of alumina can be used as an alternative to natural aluminum ore resources and it is one of the most desirable methods for the comprehensive utilization of coal gangue. However, due to the low yield of alumina and the complex process of existing processes, the project has basically no profit margins. At present, few companies are engaged in the production of this project. Sun Shuanghu also turned to study other things many years ago. "After I heard about the 115th article, I was considering further improvement of the coal gangue alumina technology. Because after the VAT reduction, the project can still achieve benefits." Sun Shuanghu said.
Jiang Zhongqin, chief economist of the Beijing Rubber Industry Research and Design Institute, believes that Circular No. 115 may have a positive impact on the rubber-oil industry, which has been difficult to achieve substantial breakthroughs in the use of waste rubber.
It is understood that China's current use of waste rubber is mainly reclaimed rubber, rubber powder and tire refurbishment of three kinds. Reclaimed rubber accounted for 71.3%, rubber powder 7.5%, tire renovation 11.8%, and other forms 9.38%. At present, the use of waste rubber to make oil has been in a gray area. Traditional waste rubber pyrolysis oil production (ie, soil refining) has been banned because of environmental issues, but new environmentally friendly waste rubber oil production technology has been difficult to achieve industrialization due to cost issues. According to Jiang Zhongqin, the waste rubber used in the annual soil refining method is no less than the waste rubber used in rubber powder. “The promotion of new environmentally-friendly waste rubber refining technology has always been subject to high costs. Three years ago, one company’s R&D equipment passed relevant technical appraisal, but it has been difficult to promote due to high costs during industrialization. Jinan Enterprises claimed to have developed environmental protection technologies for used tire oil production, and experts from Qingdao University of Science and Technology and Peking University also identified it, and this VAT reduction policy will play a certain role in boosting the new environmental rubber and oil industry. "Jiang Zhongqin said.
Worried about tax cuts, some experts believe that taxation is the most direct measure among many preferential measures. The promulgation of Document No. 115 reflects the government's determination to support energy conservation, environmental protection, and sustainable development. It also shows that encouragement-based measures should be adopted in the development of the environmental protection industry and the protection of the environment. Wang Weiqing, head of the Taxation Teaching and Research Group of the Shanghai Jiaotong University's School of Overseas Education, believes that VAT reductions or rebates are equivalent to not having to levy turnover taxes on these waste materials recycling industries.
There are also business and industry experts expressing concern about the future implementation of Document No. 115.
"From a policy point of view, we encourage enterprises to adopt new environmentally-friendly processes for the production of waste rubber. However, due to the lack of specific requirements for the indicators of new processes in the document, I am concerned about misleading some enterprises and think that they are refining the soil. We have received support; from the perspective of local implementation, I am also worried that some government departments may benefit some indigenous companies in consideration of their local interests. It is not uncommon for local governments to ignore industry standards when they go on projects. This will go against the original intention of the policy,†said one rubber industry expert.
An industry expert believes that the use of tax incentives to encourage the development of comprehensive utilization of resources is a double-edged sword. If the supervision of the environmental protection department and the quality inspection department is in place, it will effectively produce a group of truly technological environmental protection companies; but if the relevant supervision is not in place, it will allow some companies that are under the banner of circular economy, with superficial environmental protection and private pollution, to profit from it. Only local environmental protection, quality inspection and other departments can work together and exercise strict supervision to enable tax reductions to truly achieve their goals.
On November 21st, the Ministry of Finance and the State Administration of Taxation jointly issued the Notice on Adjusting and Perfecting the VAT Policy for Comprehensive Utilization of Resources and Labor Services (Caihe [2011] No. 115, hereinafter referred to as No. 115). Dozens of agricultural, industrial, household waste, and garbage utilization are subject to VAT reductions. As the country's policy of encouraging the comprehensive utilization of resources involving the most extensive scope and the greatest degree of reduction and exemption, the publication of Document No. 115 has attracted extensive attention from companies, especially chemical companies with huge potential for comprehensive utilization of resources.
In recent years, there has been increasing calls for tax cuts by companies that are overtaxed. The tone, direction, and main tasks of China's macroeconomic policy in the just-concluded Central Economic Work Conference will be clearly "steady progress." More knowledgeable people suggest that to maintain economic stability, tax reductions should be started. At the end of the year, real tax cuts really began, and it began with the comprehensive use of resources.
Doubled tax-reduction products It is understood that as early as December 2008, the Ministry of Finance and the State Administration of Taxation issued the “Notice on Comprehensive Utilization of Resources and Value-added Tax Policies for Other Products†(Cai Shui [2008] No. 156, hereinafter referred to as 156 No.) The minimum 50% VAT concession is granted to enterprises with comprehensive utilization of resources such as industrial waste, exhaust gas, used tires, and coal gangue as raw materials. Three years later, the re-issued Document No. 115 of the two departments expanded the scope of the beneficiary products, and simultaneously increased the threshold for enterprises to benefit.
The reporter found that in terms of scope, the product category covered by Document No. 115 has more than doubled over 2008.
First of all, in the category of exemption of value-added tax, the new plan added a product such as building sand aggregate produced from construction waste and coal gangue as raw materials. At the same time, on the basis of originally exempting VAT on sewage treatment services, the new regulations also include waste treatment, sludge treatment and disposal services, etc., within the scope of exemption.
Secondly, the list of preferential services that enjoy the full value-added tax is immediately increased. In addition to the five categories of high-concentration carbon dioxide and waste-to-energy generated by industrial exhaust gas, seven types of industrial waste heat power generation, biomass power generation, and sludge fuel production have been added.
Once again, the 50% VAT rebate offer list is more than twice as original. On the basis of the original, it added the comprehensive utilization of waste plastics, waste polyvinyl chloride, and waste rubber products, graphite produced from waste graphite as raw material, and 8 types of industries such as lead metal using waste batteries as raw materials, and enjoyed half value after adjustment. The list of sales of self-produced goods where the tax is paid off is increased to 14 categories.
In addition, the new program also added a preferential tax rate, which stipulates that if the sale of three types of agricultural and forestry residues such as three surpluses, second-smallest fuel wood, and crop straw is used as a raw material to produce related products, 80% of the value-added tax will be refunded.
While expanding the scope, the policy further clarifies the requirements for enjoying tax-reduced products, and it is more inclined to support the formal integrated utilization of comprehensive utilization technologies. For example, a waste plastics comprehensive utilization enterprise that enjoys a 50% preferential tax refund policy must pass the ISO9000 and ISO14000 certification; the production enterprises that use the oil sludge (scum) produced in the oil field production process must obtain “dangerâ€. Integrated Waste Management License etc. For lead recycling companies, it is clearer that the target of VAT rebates is changed from the original recycling enterprise to a company that comprehensively uses hazardous waste. The company's qualifications must also obtain the “Hazardous Waste Comprehensive Operation Permitâ€.
In May of this year, Qingdao Petrochemical Technology Co., Ltd. and China Petroleum University (East China) jointly established the Qingdao Petrochemical “Three Wastes†Utilization Engineering Technology Research Center and was unveiled. (For CFP)
The environmental protection enterprises’ clap reporters noted that in the new policy, the VAT-reduced resource utilization industry has increased the number of new biomass energy industries that include fuels such as food waste, animal manure, and corn cob, as well as new biomass energy industries. The use of waste plastics to produce recycled plastic traditional environmental protection industry, in addition to oil sludge, coal gangue, used batteries, waste photosensitive materials, waste color developer, waste catalysts and other more than 20 kinds of chemical waste treatment industry. Many companies and industry leaders heard about the policy and clapping.
“This is the best Christmas gift given to us in the recycled plastics industry. I am very happy to see this policy.†Lin Dongliang, chairman of the China Plastics Industry Association Plastics Recycling Specialist Committee, was particularly excited when interviewed. According to him, about 60 million tons of China's 60 million tons of plastic products are made from recycled plastics each year, but recycled plastics companies have been relying on low-intensity production. The promulgation of this policy is in the snow. “I have 3 recycled plastics factories, and the annual profit rate is only 3%. This policy mentioned that we must implement 50% discount on VAT rebates for recycled plastics enterprises. With the current 17% VAT rate, we can The amount of tax rebate enjoyed is several million yuan, which is more than our one-year profit!†Lin Dongliang smiled.
Lin Dongliang also favored setting a benefit threshold. In his view, companies must pass ISO9000, ISO14000 certification terms are expected to optimize the pattern of enterprises in the recycled plastics industry. “At present, we have a strange phenomenon in the recycled plastics industry: The bigger the company, the harder it is because the industry’s large number of small, undocumented and non-compliant workshops compete with formal enterprises at the expense of the environment. At present, the output value of small workshop companies in our industry It accounts for more than 60% of the total output value of the entire recycled plastics industry. If the threshold is set, the proportion of the output value of large enterprises in the recycled plastics industry may increase in the future,†said Lin Dongliang.
In the category of products with a VAT levy of 50%, the use of coal gangue as raw material to produce alumina and waste rubber products as raw materials for the manufacture of gasoline, diesel and rubber oil are also included. It is understood that the annual output of coal gangue and waste rubber in China is huge, but the utilization rate is very low. According to statistics, the annual coal gangue emissions in the country amount to about 380 million tons. Currently, there are more than 1,500 coal gangues, which totals more than 5 billion tons. According to Chang Xiaogang, chairman of Shanxi International Power Corporation, only one province in Shanxi will generate 750 million tons of coal gangue during the 12th Five-Year Plan period. According to data provided by the China Rubber Industry Association, China's current annual waste rubber production is not less than 15 million tons, but the actual processing volume is less than 500 tons. The companies and experts interviewed by the reporter believe that this policy is expected to promote the recycling of coal gangue and waste rubber.
Sun Shuanghu, chairman of Shanxi Yuncheng Aoxin Nanotechnology Co., Ltd., has been engaged in coal gangue utilization for nearly 30 years. According to him, coal gangue made of alumina can be used as an alternative to natural aluminum ore resources and it is one of the most desirable methods for the comprehensive utilization of coal gangue. However, due to the low yield of alumina and the complex process of existing processes, the project has basically no profit margins. At present, few companies are engaged in the production of this project. Sun Shuanghu also turned to study other things many years ago. "After I heard about the 115th article, I was considering further improvement of the coal gangue alumina technology. Because after the VAT reduction, the project can still achieve benefits." Sun Shuanghu said.
Jiang Zhongqin, chief economist of the Beijing Rubber Industry Research and Design Institute, believes that Circular No. 115 may have a positive impact on the rubber-oil industry, which has been difficult to achieve substantial breakthroughs in the use of waste rubber.
It is understood that China's current use of waste rubber is mainly reclaimed rubber, rubber powder and tire refurbishment of three kinds. Reclaimed rubber accounted for 71.3%, rubber powder 7.5%, tire renovation 11.8%, and other forms 9.38%. At present, the use of waste rubber to make oil has been in a gray area. Traditional waste rubber pyrolysis oil production (ie, soil refining) has been banned because of environmental issues, but new environmentally friendly waste rubber oil production technology has been difficult to achieve industrialization due to cost issues. According to Jiang Zhongqin, the waste rubber used in the annual soil refining method is no less than the waste rubber used in rubber powder. “The promotion of new environmentally-friendly waste rubber refining technology has always been subject to high costs. Three years ago, one company’s R&D equipment passed relevant technical appraisal, but it has been difficult to promote due to high costs during industrialization. Jinan Enterprises claimed to have developed environmental protection technologies for used tire oil production, and experts from Qingdao University of Science and Technology and Peking University also identified it, and this VAT reduction policy will play a certain role in boosting the new environmental rubber and oil industry. "Jiang Zhongqin said.
Worried about tax cuts, some experts believe that taxation is the most direct measure among many preferential measures. The promulgation of Document No. 115 reflects the government's determination to support energy conservation, environmental protection, and sustainable development. It also shows that encouragement-based measures should be adopted in the development of the environmental protection industry and the protection of the environment. Wang Weiqing, head of the Taxation Teaching and Research Group of the Shanghai Jiaotong University's School of Overseas Education, believes that VAT reductions or rebates are equivalent to not having to levy turnover taxes on these waste materials recycling industries.
There are also business and industry experts expressing concern about the future implementation of Document No. 115.
"From a policy point of view, we encourage enterprises to adopt new environmentally-friendly processes for the production of waste rubber. However, due to the lack of specific requirements for the indicators of new processes in the document, I am concerned about misleading some enterprises and think that they are refining the soil. We have received support; from the perspective of local implementation, I am also worried that some government departments may benefit some indigenous companies in consideration of their local interests. It is not uncommon for local governments to ignore industry standards when they go on projects. This will go against the original intention of the policy,†said one rubber industry expert.
An industry expert believes that the use of tax incentives to encourage the development of comprehensive utilization of resources is a double-edged sword. If the supervision of the environmental protection department and the quality inspection department is in place, it will effectively produce a group of truly technological environmental protection companies; but if the relevant supervision is not in place, it will allow some companies that are under the banner of circular economy, with superficial environmental protection and private pollution, to profit from it. Only local environmental protection, quality inspection and other departments can work together and exercise strict supervision to enable tax reductions to truly achieve their goals.
In May of this year, the investigation group of corporate income tax preferential policies for the comprehensive utilization of national resources investigated the issue of taxation of renewable resources industry to a plastic materials company. (For CFP)
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