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The "panorama" of Ningbo's industrial operation from the perspective of taxation
2019-03-25Text Size: A A A

inzhou District Taxation Department “Young Tax Manager” went to Supreme to explain the preferential tax policies.

The economy determines taxes, and taxes counteract the economy. As a barometer of the economy, we can see from the tax data the real business situation of a large number of enterprises, and it can also reflect the changes in economic operations. Recently, the municipal taxation department has carried out observation and research on the industrial operation situation of the city from the perspective of taxation data analysis, in order to provide decision-making reference for the city to promote high-quality economic development.

The city's economic highlights

Steady progress towards high quality development

Judging from the situation reflected in the tax data, the city's economic highlights have been fascinating since 2018, showing that the city's economy is taking solid steps on the road of high-quality development.

In the active creation of modern industrial clusters, the “drip irrigation” precision support to cultivate the first-class enterprise echelon has achieved remarkable results. From the sales invoice data provided by the tax department, the chemical industry has become the third industrial cluster that has successfully reached the 200 billion after automobile manufacturing and electrical equipment. General-purpose equipment followed, achieving sales of 193 billion yuan, and entering the 200 billion class is just around the corner. In addition, the annual sales growth of petroleum processing, metal products, non-ferrous metals, rubber and plastics, electronic equipment, special equipment and other industries with a scale of around 100 billion yuan are also above 10%.

As the pillar industry gathers and develops, emerging industries such as the digital economy are taking root. The overall size of the digital economy in the city is not large, but the growth is rapid, especially the growth rate of information technology service revenue is as high as 267.6%. The service revenue growth of software development, information technology support, and film and television program production is also around 50%. This new kinetic energy is quietly warming up.

With the deepening of Ningbo's establishment of a national high-quality manufacturing demonstration zone, the industrial and productive services industry is achieving deep integration.

The city's general taxpayers’ expenditure on purchasing R&D and technology, information technology, cultural creativity, logistics assistance, visa consulting and other productive services increased by 21.6% year-on-year, exceeding the average increase of purchased goods and services by 7.7 percentage points, especially in instrumentation, general equipment and electronic equipment. It can be seen that the investment in high-end production services such as R&D and innovation in the manufacturing industry of our city is growing rapidly, and technological innovation and “Internet + manufacturing” are making a strong push.

In terms of exploring market, in recent years, Ningbo has use the “One Belt and One Road” to explore the foreign market and continuously deepened trade cooperation with Central and Eastern Europe and ASEAN countries; it has gradually expanded its Yangtze River economic belt to the central and western regions. In 2018, Ningbo’s export share to countries along the “Belt and Road” continued to increase, especially for Central and Eastern Europe and ASEAN, which grew by 19.8% and 14.3% respectively. It is worth mentioning that the cooperation between emerging trading partners such as Ningbo and Brunei is also increasing, and the export value has increased by more than 10 times. On the other hand, the domestic sales of Ningbo enterprises gradually expanded to the central and western regions, especially in Yunnan, Guizhou, Hunan and other places in the Yangtze River Economic Belt. The potential for trade cooperation was continuously released and economic activity was increasing.

In terms of household consumption, according to VAT filing, the reported sales of wholesale and retail industry continued to maintain double-digit growth, especially the improvement of sales of consumer goods, culture, sporting goods and equipment, meat, poultry, eggs and aquatic products. The growth rate of decorative materials such as lamps and furniture, cosmetics, etc. is more than 30%.

In addition, the consumption income of upgraded services such as entertainment, radio and television production, health, culture and art, and education also maintained an increase of more than 20%. On the contrary, the consumption of residents in grain, oil, tobacco, alcohol, beverages, nutraceuticals and automobiles has mostly increased slightly or tends to decline. It can be seen that the propensity to consume of the citizens has gradually become more rational, and the consumption upgrade has steadily advanced, gradually becoming a stabilizer for stimulating economic growth.

In 2018, the city's tax authorities fully implemented a number of tax reduction measures, such as the VAT reform introduced by the state, and the comprehensive taxation and taxation reforms. The corporate tax burden dropped significantly, further enhancing the innovation vitality of enterprises.

Qian Binhua, the postdoctoral fellow of the Department of Finance of the Ministry of Finance and the Institute of Science and Technology of Ningbo City Vocational and Technical College, believes that under the background of tax reduction and fee reduction, the effect of taxation and conservation economy is accelerating, and the overall strength of the city's enterprises is continuously enhanced. “VAT sales and invoice data show the “panoramic map” of the production and operation of the city's enterprises, especially the development of the manufacturing industry and emerging industries in the city. From the invoice data, we can also see that the exchanges and cooperation between the enterprises in the city and the international and domestic markets are increasing. Therefore, under the context of complex external environment and obvious increase in risk challenges, these achievements are indeed not easy."

 

Increased downward pressure

Economic operation still has hidden concerns

Although there have been some highlights in the city's economy since 2018, it should also be noted that the downward pressure on the economy is also increasing.  

The data shows that due to the decline in the prices of important production materials in the circulation field, the sales and profits of the manufacturing materials in manufacturing industries such as petroleum processing, chemical products and ferrous metals in the fourth quarter of 2018 have dropped significantly. The unexpected drop in the Industrial Product Price Index (PPI) reflects a reduction in the profit margins of industrial enterprises, and the demand for downstream industrial enterprises has shrunk or has become apparent.

At the same time, the automobile market is sluggish and the downturn affects the upstream. The automobile manufacturing industry is an important pillar of the city's economic development. The current automobile consumption demand has declined, and the overall growth rate of upstream and downstream enterprises in automobile production has declined, which has a great impact on industrial economic growth. According to the analysis of the relevant person in charge of the taxation department of the city, from the perspective of the automobile consumption demand reflected by the automobile purchase tax, since June 2018, the demand of the automobile market has experienced a large decline continuously, with a cumulative decline of 11.6%. It can be seen that the automobile consumption demand is facing a huge shrink due to the slowdown in economic growth and the cancellation of policy dividends.

 From the supply situation, the production and sales of complete vehicles and parts and components have declined, resulting in a decline in the overall sales growth rate of the industrial economy by nearly 10%. “Although SAIC Volkswagen once again won the championship in the 2018 car sales list, Geely Automobile ranked among the top five, but due to the saturation of the automobile market and the oversupply caused by the shrinking consumer demand, which also affected the upstream industry. Subsequently, the overall real economy declined. It is still worth noticing," the official said.

Judging from the export situation of enterprises reflected by the export tax rebate system, the overall growth of foreign trade exports of the city in 2018 is relatively fast. The US dollar export value of tax rebates (exemption) in the first three quarters increased by 19.6% year-on-year, and the growth rate is much higher than the nominal increase of GDP in the same period, but since October 2018 there was a significant downward trend. According to statistics, in the fourth quarter, the amount of export-free (exemption) tax enterprises decreased by 9.4% from the previous month. It can be seen that the negative impact of Sino-US trade friction on exports has gradually emerged. Coupled with the slowdown in the growth of international market demand and the limited space for RMB depreciation, the export situation is more severe.

Judging from the sales of VAT in various regions, except for the functional areas such as Meishan and Dongqian Lake, which continued to maintain steady growth, the sales growth of the other districts (cities) in the fourth quarter of 2018 showed different degrees of decline. Among them, automobile, petrochemical, foreign trade and other key large households concentrated in Beilun, Haishu, Yuyao, Ninghai and other regions, the sales growth fell from the double-digit growth in the first three quarters to less than 10%;

The sales growth in Daxie Development Zone, Bonded Zone, etc. also due to downturn impact of key industries such as real estate and petrochemical, fell from around 30% in the first three quarters to 10%. Some taxation experts believe that the current round of economic downturn is mainly caused by the decline in domestic and international demand caused by the decline in industrial prices, and the scope of the spread is wide.

 

Economic Outlook for 2019

 

At present, the city's economy has maintained a generally stable, and progressive development trend, laying a good foundation for further high-quality development. 2019 is the 70th anniversary of the founding of the People's Republic of China. It is a crucial year for building a well-off society in an all-round way and achieving the goal of the first century. "The Party Central Committee and the State Council have made adjustments to focus on major contradictions and further realize the economic stability of the 'six stables' in response to changes in the international environment and domestic conditions.

In 2019, the central government will continue to implement a prudent monetary policy and active fiscal policy. The reasonable and sufficient liquidity will provide a stable and good financial and monetary environment for promoting high-quality economic development, further increase financial support for the real economy;a new round of larger tax reduction measures and a package of favorable support policies for private enterprises and SMEs will inject strong momentum into economic growth. The relevant person in charge of the Municipal Taxation Department judged that the opportunity to seize the national strategic convergence, the superposition of reform pilots, and the improvement of the business environment will further promote the high-quality development of Ningbo's economy.

 

At the same time, the economic development of the city in 2019 is also facing some uncertain factors. Some experts in taxation and taxation pointed out that on the international front, the external environment has undergone significant changes, and the global economic recovery has weakened significantly. In particular, the uncertainty of Sino-US trade friction has increased, and the impact on the export enterprises, especially equipment manufacturing and other advanced manufacturing enterprises, will further weaken the export role of the economy. Domestically, the growth of fixed asset investment is weak, especially industrial investment and infrastructure investment, only increased by 1.1% and - 0.6% in the first three quarters. Although the central government clearly increased the infrastructure to fill the shortcomings, the policy effect was significantly weaker than expected. In addition, the consumption growth of residents is stable, but the high-leverage purchase of ordinary households has already formed a crowding-out effect on household consumption, which has reduced consumption growth to some extent. 

Regarding the economic situation in 2019, Qian Binhua believes that in addition to attaching importance to the "grey rhinoceros" incidents such as the impact of Sino-US trade friction on the foreign trade of our city, we must also guard against the possible "black swan" in the fields of economy and finance at home and abroad. We should "improve good internal strength", expand external resources, and steadily do a good job in economic work in 2019.

In conclusion, under the implementation of a new round of larger-scale tax reduction measures, the city's economic operation is more optimistic than pessimistic, and the steady and better development trend will continue. In 2019, the city's economy will continue to increase steadily under downward pressure.

 


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