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Tax Reduction, Subsidies, Restriction On "Relaxation": How To Increase Car Consumption?

2020/5/26 10:24:00 2

Tax CutsSubsidiesCarsConsumption

In May 22nd, the government work report pointed out that the global epidemic situation and economic and trade situation were uncertain, and China's economic development was faced with some unforeseen factors. With the acceleration of the resumption of work resumption and recovery, the economy has recovered faster. However, there are still many uncertainties in the global pandemic, and the foundation for recovery is not strong enough.

The decline in domestic and foreign demand has led to the economic cycle hindered. The residents' consumption of non essential consumption has been seriously inhibited. The consumption of commodities such as real estate and automobiles has declined sharply, and the growth of consumption has been obviously restricted.

As we all know, the automobile industry is an important pillar industry in the development of national economy. The added value of the automobile industry accounts for about 3% of GDP. It can promote and promote the development and employment of many industries such as steel, machinery, chemical industry, rubber, electronics, scientific research, automobile service, automobile insurance, automobile finance and so on.

It is estimated that in 2019, the national automobile manufacturing industry had a revenue of 8 trillion and 80 billion yuan, maintaining the manufacturing industry ecology and supply chain stability, and avoiding or reducing the long-term negative impact of China's economy.

China Automotive Industry Association data show that in April this year, China's auto production and sales achieved year-on-year growth and annulus growth, ending a 21 consecutive month of decline. In the industry view, it is inseparable from the central government, local governments and enterprises.

"Local policy has become the main force of the policy this year, and it is expected to boost the sales volume of passenger cars in 2020 by 79-116 units, accounting for 3.5%-5.1% of passenger car sales in 2019." In May 21st, Xingye Securities pointed out in the research report. According to its calculations, the provinces and cities that have explicitly issued stimulus policies are expected to increase sales by 785 thousand vehicles in 2020, accounting for 3.5% of the 2019 passenger car sales. Societe Generale Securities expects potential further stimulus spending is expected to boost 370 thousand local car sales, accounting for 1.6% of passenger car sales in 2019.

Therefore, in the face of the automobile industry that has not yet fully recovered from the epidemic, how to stimulate automobile consumption and promote the transformation and upgrading of the automobile industry through tax reduction, subsidies, restriction of purchase, "deregulation" has become a hot topic this year by the representatives and members of the two enterprises.

Promoting tax and fee reform

Since 2018, China's automobile consumption market has been declining for two consecutive years, and the spread of the epidemic this year has seriously affected the development of China's automobile industry.

On stimulating automobile consumption, many delegates thought that the development of China's automobile industry is of high quality and needs to further activate consumption vitality. Among the many constraints, the tax system of the automobile industry has become an important obstacle for the local to boost the initiative and enthusiasm of automobile consumption.

Therefore, Li Shufu, chairman of the National People's Congress, President of the Great Wall automobile and Wang Fengying, chairman of the National People's Congress and chairman of Geely Holding Group, suggested that the vehicle purchase tax should be changed from central tax to central local share tax, and the proportion shared by the central and local governments should be 50%.

At the same time, the appropriate proportion of adjusted vehicle purchase tax will be applied to the R & D of new technologies in automobile enterprises and the promotion of automobile consumption. At the consumption level, the appropriate proportion of local revenue from adjusted vehicle purchase tax will be used to continuously promote the policy of "car going to the countryside" and implement relevant subsidy measures for automobile consumption so that consumers can enjoy tangible benefits, and the potential of China's automobile consumption market will also be further excavated and released.

Ceng Qinghong, chairman of the National People's Congress and chairman of Guangzhou Automobile Group, thinks that the number of thousands of cars in China is only about 1/5 of that of developed countries. The domestic automobile market still has great potential to be excavated, and it is feasible to promote automobile consumption by introducing policies to improve the consumption environment.

Therefore, Ceng Qinghong suggested reducing the overall tax burden on automobile consumption, improving the automobile consumption environment, expanding the consumption channels and stimulating consumption. These include the reduction and exemption of Luqiao fees and the optimization of the subsidy policy for automobile consumption, etc., to drive the consumer market; to speed up the release of pickup trucks to speed up the city; to increase the support of rural cars to the countryside, to implement special subsidies or preferential policies for the rural people to buy cars, to further reduce the overall tax burden on vehicle consumption, to reduce the purchase tax, to reduce the consumption tax rate, to deduct the interest on loans and the personal income tax. The second is to adjust the vat of second-hand cars, vigorously develop auto finance and other policies, reduce the cost of car purchase, stimulate automobile consumption, reduce the new energy, second-hand car down payment ratio and mortgage interest rate, and encourage auto finance to extend to the market and many other specific suggestions.

Zhou Shanhong, chairman of the National People's Congress and chairman of the Jiangsu Wanshun electrical and Mechanical Group Co., Ltd., Secretary of the Party committee, called for continued burden reduction for private enterprises, and further refined the measures to reduce the burden on enterprises and promote the development of the real economy. It includes further promoting the reform of the financial system, reducing the use cost of enterprise funds, further easing the employment environment of enterprises, and appropriately reducing the tax burden of enterprises.

In addition, NPC deputy, Chen Hong, chairman and chairman of the SAIC Party committee, said that we should relax the restriction on the extraction of housing accumulation fund and promote consumption.

"The policy of stimulating automobile consumption is generally good, but at present, China's automobile industry has entered a stable development stage after the implementation of the policy, and a simple tax reduction is not necessarily an effective stimulus." On May 25th, Cui Dongshu, Secretary General of the information conference of the national passenger car market, said in an interview with the twenty-first Century economic report reporter.

"If the tax cuts are simple, the local governments will be more reluctant to develop the automobile industry." Cui Dongshu said that at present, local governments' income in the real estate industry has declined, and the increase of other areas' economic income is the key to supporting local development. The proposal to reduce taxes is entirely correct from the perspective of the enterprise's own interests, but it is unrealistic from the perspective of the whole industry and from a social perspective.

Proposed restriction on "deregulation"

In the proposal to stimulate car consumption, taking into account the long-term downside of the car market and the "rigid demand" of the consumers in the restricted cities, the relevant departments gradually released the policy of relaxing the restriction on the purchase of automobiles. Meanwhile, the proposal to cancel the restriction and restriction policy was put on the agenda again.

Ceng Qinghong believes that policies should be introduced to encourage the purchase of motor vehicles and related products. We should appropriately increase the number of vehicle license plates, cancel the purchase restriction or relax the access conditions for car purchases, and relax the restrictions on individual or family car licences.

Fang Yun Zhou, director of the National People's Congress and director of Zhejiang Union New Energy Automotive Co. Ltd., suggested that the new city's new energy vehicle purchase quota should be liberalized first.

The cancellation of restrictions on car purchases and other topics has also triggered discussions among netizens. Micro-blog's proposal to cancel the restriction on car purchases is up to 160 million.

In view of the most stringent policy of the Beijing limited, the CPPCC National Committee member and vice president of Civil Aviation University of China, Wu Yan Bi, suggested that under the background of coordinated development of Beijing, Tianjin and Hebei and the joint development of Beijing, Tianjin and Shuangcheng, Beijing will cancel the policy of restricting Tianjin's cars, so that vehicles will be able to move smoothly in Beijing, Tianjin and two places.

"Restricting the purchase of cars is not in line with the spirit of this year's government work report." In May 25th, a car industry expert told reporters that only Beijing had a new policy on the purchase of new energy vehicles. Moreover, the new energy vehicles defined by Beijing were purely electric vehicles, which were seriously unreasonable.

"The government work report" pointed out that we should use reform and opening up measures to stabilize employment, protect people's livelihood, promote consumption, stimulate the market and steady growth, and step out a new way to effectively respond to shocks and achieve a virtuous circle. The restriction on the purchase of vehicles is completely in line with the statement in the government's work report. The experts said.

Recently, the Tianjin municipal government issued the "measures to promote automobile consumption in Tianjin". It is clear that in 2020, Tianjin will add 35000 personal increment quota allocation to all passenger cars, all of which will be allocated in Yaohao mode. Previously, Guangzhou, Shenzhen, Hangzhou, Shanghai and other places have made a "relaxed" measures to purchase vehicle indicators.

But how to further stimulate consumers' enthusiasm for car consumption and make local governments more able to protect the congestion caused by the increase of license plates is also a problem that must be faced after the implementation of policies.

In recent years, the government has been pushing ahead with the restriction of "loosening". This proposal is possible in other cities, but it is totally impossible for Beijing to modify the foreign vehicle entry policy and restrict the purchase of "Relaxation". Cui Dongshu told reporters, "Beijing's policy of restricting the purchase and purchase of products can persist for such a long time. It is for many reasons."

In Cui Dongshu's view, the demand for car purchases by the Beijing community has not been solved, and the foreign group is more difficult. The integrated traffic travel measures should be further improved.

Although it is impossible to cancel the restriction policy, Cui Dongshu believes that the policy of promoting automobile consumption in Tianjin is worth learning from Beijing.

"The Beijing restricted licence has played a certain role in relieving traffic pressure, but as a suburb of the people, it is difficult to obtain the Beijing license through Yaohao policy. If the government set up a ban on entering the suburbs of the Fifth Ring Road, it will be convenient for Shunyi, Changping, Pinggu and other suburban people to travel. This will not only lead to automobile consumption but also little impact on traffic." Cui Dongshu finally said.

(author: Southern finance and Economics National two sessions report group Du Qiaomei)

 

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