From April 1 to 15, the first declaration period for the environmental protection tax will begin. On January 1, 2018, the Environmental Protection Tax Law officially came into effect. According to the law, the tax is declared quarterly, meaning April 1 marks the first collection period. As of now, tax authorities across regions have identified and recognized over 260,000 taxpayers for the environmental protection tax. Taxpayers Enterprises, institutions, and other producers and business operators that directly discharge taxable pollutants into the environment within China's territory and other sea areas under China's jurisdiction are taxpayers of the environmental protection tax and shall pay it in accordance with the law. This scope includes most manufacturing industries and some heavily polluting processing industries, involving over 5 million enterprises. In other words, if your factory is involved in industries such as thermal power, steel, stone, cement, electrolytic aluminum, coal, metallurgy, building materials, food processing, brewing, textiles, leather, fermentation, electroplating, printing and dyeing, papermaking, chemicals, pharmaceuticals, and other polluting industries, you must pay the environmental protection tax. As mentioned in previous articles, the collection of the environmental protection tax is a redistribution of corporate interests, increasing their costs. What we worry about most is "price increases." There are rumors that since the beginning of this year, many well-known food companies have issued price increase notices, and some products have stopped promotional policies, which is seen as "disguised price increases." Furthermore, there are calls for distributors to stock up quickly, otherwise, as raw material prices soar, products will be priced differently. Such almost "inflammatory" articles are everywhere. A quick online search for keywords like "environmental protection tax" and "price increase" shows that no industry is spared. The pervasive "wave of price increases" makes people anxious. Having seen too many tricks, let's calm down and think: price increases are caused by a certain increase in corporate costs (and such an increase that enterprises can no longer bear on their own). So, does the environmental protection tax really add high costs to enterprises? Several key issues can be examined. 01 Environmental protection tax rates have a clear upper limit, with increases and decreases compared to the previous pollution discharge fee The impact of the environmental protection tax on corporate burden mainly depends on the change between the pollution discharge fee previously borne by the enterprise and the environmental protection tax amount after the reform. In terms of tax rates, the lower limit of the environmental protection tax rate is consistent with the pollution discharge fee system. For the upper limit, given that in some areas like Beijing, the pollution discharge fee collection standard has been raised to 8-9 times the minimum standard, the tax rate upper limit is set at 10 times, and local governments are authorized to determine specific tax rates. At the same time, the tax amounts for industrial solid wastes such as smelting slag, fly ash, and furnace slag have been adjusted to a uniform standard of 25 yuan per ton; industrial noise has been adjusted to set a tax bracket for every 3 decibels exceeding the standard, with the lowest tax amount determined for each bracket. Additionally, the environmental protection tax has abolished the double collection provision for excessive discharge of water pollutants under the pollution discharge fee system. If the specific tax rates chosen by each region after the introduction of the environmental protection tax are consistent with the adjusted pollution discharge fee collection standards in that region, then the environmental burden on enterprises in each region will not change. However, considering that some regions may choose a collection standard higher than the original pollution discharge fee after the tax is introduced, the burden on enterprises in such cases will increase, and the degree of increase is related to the extent to which local governments raise the specific tax rate of the environmental protection tax. 02 Tax reduction and exemption policies have been implemented simultaneously with the preferential catalog The environmental protection tax replaces the pollution discharge fee, giving it stronger enforcement rigidity, but the "fee-to-tax" reform does not necessarily mean an absolute increase in corporate costs. On the one hand, there are tax reduction and exemption policies for enterprises that actively reduce emissions; on the other hand, corresponding measures to encourage enterprises to actively improve their emission reduction capabilities are also being introduced simultaneously. The "Catalogue of Corporate Income Tax Preferences for Energy-Saving, Water-Saving, and Environmental Protection Special Equipment (2017 Edition)" was officially issued in September 2017. The new catalog includes 6 major categories and 24 items, covering new fields such as volatile organic compounds, soil, noise, and solid waste (kitchen waste, electronic waste, batteries). It basically achieves "full coverage" in the field of environmental governance. According to the "Enterprise Income Tax Law," if an enterprise purchases and actually uses special environmental protection equipment, it can offset 10% of the equipment investment amount against the enterprise income tax payable. The update of the catalog means that more enterprises can enjoy tax reductions and exemptions in the process of updating equipment to control pollution. 03 Strengthened collection and management, environmental costs cannot be "escaped" After the reform of the environmental protection tax, collection and management have been strengthened. The problems of negotiated fees and arrears that may have existed in the past under the pollution discharge fee collection and management will be resolved under the collection and management of tax authorities. At the same time, as environmental protection departments strengthen supervision of enterprise pollutant discharge, data fraud will gradually decrease, and data such as the amount of pollutants declared by enterprises will become more truthful and reliable. Therefore, the collection rate of the environmental protection tax relative to the pollution discharge fee will increase, which to a certain extent does increase the actual burden on enterprises. In addition, some enterprises that did not previously pay pollution discharge fees may be included in the collection scope after the implementation of the environmental protection tax, which will also increase the burden on these enterprises. Therefore, after the collection of the environmental protection tax, the actual "environmental" costs for enterprises have increased or decreased, and the magnitude of change is related to the difference between the tax rate level and the previous pollution discharge fee standard, tax reduction and exemption policies, strengthened collection and management, and changes in the scope of taxpayers. Now, looking back at this wave of "price increases," is it really closely related to the collection of the environmental protection tax? It's a matter of opinion. Source: Frozen Food (ID: ldzk001) -END-