Chinanews.com, December 21. China Government.com today released the "Circular on the Supervision of Huaiyuan County, Anhui Province’s Violation of Tax Reduction Policies and Increasing the Burden of Enterprises," stating that the Huaiyuan County government and relevant departments are reducing taxes and fees. In terms of implementation, discounts and adaptations, violations of regulations and willful decisions, interception of tax sources to hedge short-term revenues, disrupt the order of tax collection and management, and seriously increase the burden on enterprises.

Regarding the problems discovered by the inspection, the Huaiyuan County Government of Anhui Province said that they will accept all the orders, immediately stop relevant violations, and seriously carry out self-examination and rectification.

　　According to reports, a few days ago, according to the clues of the problems reported by the masses on the "Internet + Inspection" platform of the State Council, the State Council's Inspection Office sent personnel to Huaiyuan County, Bengbu City, Anhui Province to conduct open and unannounced visits.

The inspection found that the Huaiyuan County government and relevant departments interfered with the tax collection and management order in the name of "response to the impact of the epidemic and strengthened taxation and protection of taxes", set entry thresholds for the construction market in violation of regulations, and maliciously withheld project funds, which seriously increased the burden on enterprises.

　　The situation is as follows:

　　The Huaiyuan County government requires small-scale taxpayers in the construction industry to apply for registration as general taxpayers in disguise, which violates regulations and raises the cost of corporate taxes, which runs counter to the national tax reduction policy.

The inspection found that on April 22, 2020, the Huaiyuan County Government issued the "Huaiyuan County Response to the Impact of the Epidemic to Further Strengthen Tax Assistance and Tax Protection Work Plan" on April 22, 2020 in the name of the county tax protection work leadership group, which required the original 1% collection rate to pay value-added Small-scale taxpayers in the construction industry apply for registration as general taxpayers and pay taxes at a 9% value-added tax rate.

Within one month of the work plan, the small-scale taxpayers of the construction industry in Huaiyuan County dropped from 171 to 60, a decrease of 64.91%.

According to investigations, from January to November 2020, 175 general taxpayers of the construction industry were newly registered in Huaiyuan County, an increase of 102 from 2019, a year-on-year increase of 139.73%; the amount of VAT payable increased by RMB 23,479,600 from the same period last year, a year-on-year increase 82.07%.

After some construction companies declared the inbound tax as a small-scale taxpayer that month, they were forced to change to a general taxpayer, treat the original invoices as “red-red”, and re-issue an invoice with a tax rate of 9% to declare tax.

The “Administrative Measures for the Registration of General VAT Taxpayers” of the State Administration of Taxation stipulates that those who choose to pay taxes as small-scale taxpayers in accordance with the policies and regulations shall not apply for general taxpayer registration.

The Ministry of Finance and the State Administration of Taxation "Announcement on Supporting the Resumption of Value-Added Tax Policies for Individual Industrial and Commercial Households" and relevant documents stipulate that from March 1 to December 31, 2020, except for Hubei Province, the value-added tax of other provinces, autonomous regions, and municipalities will be small. For large-scale taxpayers, taxable sales income at a levy rate of 3% is applicable, and value-added tax is levied at a reduced rate of 1%.

　　At the same time, Huaiyuan County instructed the taxation, housing construction and other departments to jointly carry out supervision actions in order to allow enterprises to keep their tax revenues locally, in disguised form requiring enterprises to establish local branch (subsidiary) companies.

The inspection found that Huaiyuan County clearly required the enterprise to establish a branch (subsidiary) company before signing the contract in the bidding documents for the construction of drainage projects in the beautiful countryside, otherwise the qualification of the bid winner would be cancelled.

In accordance with the practices of the county government, all townships require construction companies to set up branch (subsidiary) companies in their own towns and townships, which has led local enterprises to set up branch (subsidiary) companies in multiple towns and villages.

The aforesaid behavior violated the “Opinions of the State Council on Establishing a Fair Competition Review System in the Construction of the Market System” on “not to exclude, restrict or force foreign operators to invest or establish branches locally” and other provisions.

　　Not only that, Huaiyuan County requires construction taxpayers who are temporarily engaged in production and business activities across counties in the same provincial city to apply for cross-regional tax-related matters.

The inspection found that 11 construction companies in Bengbu City were forced to prepay 3.065 million yuan in taxes and fees in Huaiyuan County.

The Announcement of the State Administration of Taxation on Further Clarifying the Collection and Administration Issues Related to the VAT Reform and other relevant documents clarify that taxpayers providing construction services across counties (cities, districts) within the same prefecture-level administrative region are not applicable to prepayment of taxes to the place where the construction services occur Related requirements.

　　The notification showed that the financial department of Huaiyuan County regards the local tax contribution as a precondition for the payment of project funds, and issued reminders in violation of regulations to interfere with the order of tax collection and administration.

The inspection found that Huaiyuan County issued the "Construction Project Taxation Form" in violation of regulations, taking the ability of the construction enterprise to provide invoices with the agreed tax rate for bidding as a necessary condition for the payment of the project payment, adding the review of the enterprise project cost and tax payment, and expressly prohibiting the comprehensive The tax contribution rate (that is, the proportion of the cumulative amount of tax paid in Huaiyuan County and the tax amount of local cost invoices to the project settlement amount) is less than 4% of the construction project allocation.

As of the time of the supervision, Huaiyuan County had issued and reviewed 336 copies of the "Construction Project Tax Status".

Although some enterprises have completed the application materials, they are unable to obtain project funds due to lack of tax payment forms.

Construction projects undertaken by many enterprises have already been completed, and paying VAT at the small-scale taxpayer's rate of 1% does not meet the local comprehensive tax contribution rate of 4%. As a last resort, they can only issue building material cost invoices at the county tax bureau.

According to investigations, from May 1 to November 30, 2020, small-scale taxpayers or natural persons of the construction industry in Huaiyuan County issued 2,812 VAT invoices on behalf of the county, which was 1.96 times that of the same period last year.

During the inspection of the relevant accounting vouchers, the inspection team found that a large number of companies issued invoices on their behalf. Some companies said that because some of the raw materials cannot be produced locally and need to be purchased in other places, and they require local invoices, they can only go to the local tax authority to "issue invoices on behalf of others." ".

Unannounced visits revealed that the local basic-level financial office even directly issued false invoices to enterprises for "local acquaintances".

　　In order to increase the comprehensive tax contribution rate of enterprises, the Huaiyuan County Finance Bureau has issued supervision reminders or inspection notices to the tax bureau many times, and listed construction enterprises whose comprehensive tax contribution rate of the project payment is less than 4% as an exception, requiring the tax bureau to carry out Check feedback.

In September 2020, when the comprehensive tax contribution rate was less than 4%, many companies were forced to issue a so-called statement to the county finance bureau in order to receive project funds. After making a commitment to reach 4% next month, the relevant The money will be disbursed.

The aforesaid behavior violates the "Regulations on the Protection of Payments for Small and Medium-sized Enterprises" that "organizations, institutions and large enterprises shall not require small and medium enterprises to accept unreasonable payment terms, methods, conditions, and liability for breach of contract, etc.) Provisions on engineering and service payments.

　　The Huaiyuan County Government carried out the assessment of fiscal revenue targets in violation of regulations and issued incentives in the name of "taxation assistance and protection of taxes".

The inspection found that in 2019, Huaiyuan County incorporated the tax collection and management of the construction industry into the local economic operation "one quarter, one assessment" reward and punishment mechanism, and in August this year, it issued a 2019 economic development assessment bonus of 2.0154 million yuan in violation of regulations.

In April 2020, Huaiyuan County once again included taxation indicators in the annual fiscal revenue and expenditure target assessment, and included the handling results of the "problems" found by the county tax security work leading group office into the department’s annual target assessment, and assessed the townships and counties on a quarterly basis. The completion of tax revenue and other fiscal revenue targets of various departments.

In addition, Huaiyuan County, under the banner of "Taxation and Taxation Protection", proposed to issue rewards to the top taxation units in the 2020 assessment work. 40% of this will be directly used to reward the main person in charge of the department, and the remaining part will be allocated to each department. According to internal functions, the contribution rate of "tax assistance and protection" is used to reward specific staff; if the failure to perform the task of "tax assistance and protection" causes tax loss and the tax payment cannot be recovered, the same amount of public expenditure of the department will be deducted, Allow each township to refer to the implementation.

The aforesaid behavior violated regulations such as the evaluation and ranking of indicators such as the fiscal revenue of lower-level governments.

　　According to the report, from the inspection situation, the Huaiyuan County government and relevant departments are not resolute and inadequate in implementing the Party Central Committee and the State Council’s "six stability" and "six guarantees" decision-making arrangements. They have discounted and made flexibility in the implementation of tax and fee reduction policies. , Against the wind, illegal, willful decision-making, withholding tax sources to hedge short-term revenue, disturbing the order of tax collection and management, and seriously increasing the burden on enterprises.

In this regard, all regions and departments should take a warning, draw inferences from one another, resolutely implement the decisions and deployments of the Party Central Committee and the State Council, insist on administration and handling affairs in accordance with the law, no matter how tight financial resources are, they cannot touch the "cake" of market entities, and they cannot hit the enterprises. "Small abacus" and "excessive tax".

It is necessary to resolutely reduce the tax cuts and the fees that should be cut in place, fully implement the relief policies for helping enterprises, and actively help small, medium and micro enterprises to tide over the difficulties.

　　Regarding the problems discovered by the inspection, the Huaiyuan County Government of Anhui Province said that they will accept all the orders, immediately stop relevant violations, and seriously carry out self-examination and rectification.

The State Administration of Taxation attaches great importance to it, and dispatches personnel to conduct on-site inspections and promote the refund of prepaid taxes paid by construction enterprises by local authorities.

The State Council Inspection Office will closely follow up the follow-up progress and urge the rectification of problems in place.