Reporter, china energy
This is the first time that a company has been able to pay its taxes
Is it really that high
Coal-based oils, raw materials, produce oils such as diesel, gasoline, plaster oil and are subject to both coal and oil prices. In other words, oil prices are a key factor in addition to their own costs, such as raw coal and fixed assets and management. It is generally assumed that when international oil prices are maintained at us$ 50-60 per barrel, coal-based oils can reach a balance of gains and losses, and the higher the oil prices, the greater the scope for business profits。
“in recent years, however, international oil prices have continued to operate at a low level, leading to a deep decline in the prices of coal-based oil products. Together with high coal prices in the recent past, even if technology is upgraded, it is difficult to reverse the effects of low oil prices. On the basis of low oil prices and high coal prices, the tax burden makes losses on coal-producing projects more inevitable.” jia junan, general manager of the coal chemical company of the holy land。
Sun kai wen, deputy general manager of the sanxi future energy chemical co. Ltd., shares this sentiment. He indicated that, after three consecutive increases in the consumption tax on finished oils in 2014, the tax on diesel products was raised to $141. 12 per ton and 215. 2 per ton per ton for stone-breath oil products, which represented 47. 32 per cent and 76. 85 per cent, respectively, of the sale price of mineral products. In the case of the one million tons of coal oil produced annually, the excise tax alone is 1. 5 billion yuan a year. “in 2014, taxes were adjusted as a result of the sharp fall in oil prices, with the aim of curbing excessive oil consumption, but the international price increase did not reverse it accordingly.”
The pressure is also illustrated by a set of figures: 4,200-4800 yuan per unit cost zone for a ton of coal oil products, with a combined tax on a ton of products of about $1860, at a cost of about 40 per cent per consumption tax alone. “it is indeed beneficial to stabilize the crude oil market by adding a consumption tax based on the fall in international oil prices, but it is certainly even worse for our coal oil companies.”
It has long been difficult to reverse the high tax burden or to overwhelm the “last straw” in the coal oil industry. A person close to the national energy agency confirmed to journalists that “measures show a combined tax of 36. 82 per cent on diesel fuel for the coal oil demonstration project, 58. 98 per cent on plaster oil, and that the actual value added tax on coal oil products is much higher than that on petroleum-based products. In 2105, for example, there was a loss of $1592. 85 per ton of diesel oil produced, and a loss of $1835. 99 per ton of grub oil produced by the enterprise.”
A group of companies petitioned and the industry shouted
Is the tax reduction reasonable
Under pressure, coal oil companies reflect their situation in different ways and through different channels. “the answer to the question is yes, and the report is "silent." is there any relief? If not, what's the point? Businesses would like the authorities to say the same。
So, should we cut the tax on consumption in the coal industry? An analysis by a senior expert in the coal-chemical industry suggests that the consumption tax on finished oil is levied on oil and that, theoretically, it should be paid to those who meet the oil requirements, regardless of their origin. “whether imported, self-exploited, refined or produced from coal, oil shall be taxed as required. Just as luxury goods are taxed, it has nothing to do with who and where they are produced. It follows that taxation is justified”。
In practice, however, coal oil differs from traditional petroleum refining. “in addition to its technical content, coal oil is an important means of clean-up of coal and is one of the directions that the state encourages support. From the point of view of the fact that excise taxes mainly limit consumer goods that are energy-intensive, polluting and consuming, there is an unreasonable element of taxation that should be adjusted for relief.”
The relationship between coal oil and “supplementation” of petroleum products also led to the view that the relief was justified by the presence of the director of the research centre of the china coal economic research institute, a company listed as a company. “coal-based oils are not the same as oil-based products, the former with higher international oil prices and higher profits; the lower the price of oil, the better for traditional refineries. A tax to regulate two completely opposite industries is unfair to the coal oil industry, and the two should not be simply applied.”
In addition, the special industrial attributes of coal oil also determine the urgency of tax relief. For example, the above-mentioned experts noted that the price of coal oil products was inherently constrained by the existence of the “reference” to international oil prices. “for example, when international oil prices were 80 yuan/bbl, coal oil companies priced 180 yuan/bbl because of its high cost, which resulted in non-sale. Unlike luxury goods, consumption taxes may be transferred to consumers, and coal oil taxes are borne by enterprises themselves, which in the long run have resulted in unprofitable losses and losses that are detrimental to the overall development of the industry.”
There is no reason for this
How should it be adjusted
The adjustment is justified and how should it be implemented? In the view of zhuang, this is not an overnight change, but should first be based on full research. “any change in taxes is based on a long and in-depth study, which, in my view, is one of the reasons why the tax cuts on coal oil have been delayed. There are few specific studies in the relevant sectors on how to land the adjustment.”
In response to the reorientation, industry experts recommended that:
On the one hand, a “one-size-fits-all” approach could be attempted, with tax revenues shifting in response to fluctuations in international oil prices. When international oil prices rise and the profit margin for coal oil increases, tax levels can be raised to control consumption; when oil prices fall, tax revenues can be lowered, thereby maintaining business operations. That is, the opposite of the “reverse taxation” of the current excise tax. On the other hand, it can be “step-by-step”, without the need for a one-time, full-scale relief, so that the tax rate can be gradually reduced in a step-by-step manner, depending on the situation。
“for example, in the case of different crude oil prices, a phased reduction in the excise tax on coal oil items could be introduced. The excise tax is fully exempt when the international price of crude oil is less than us$ 50/bbl; the excise tax is reduced by 70 per cent when us$ 50-60/bbl; the excise tax is reduced by 50 per cent when us$ 60-75/bblb; and the excise tax is paid normally when more than us$ 75/bbl.” these senior experts further analysed。
The proposal for a differentiated tax was endorsed by jayann. He indicated that coal oil, as a high-technology industry, could draw upon the fiscal, tax and financial support policies provided by developed countries for high-technology industries in the early stages of our development. “in terms of technology processing, coal-based oils are subject to a series of special processes and processes, together with expensive catalysts, which would have been more costly to produce than oil-based products. It is recommended that the special characteristics of these industries be taken into account and that differentiated, lower tax policies be applied, with the corresponding exemptions from the consumer tax on finished products, value added tax, income tax, etc., in line with the policies of developed industrial countries to support new industries.”
