VAT levied fertilizer, will moderately improve fertilizer costs, speed up the elimination of backward enterprises, optimize fertilizer industry structure, improve operational specification of the fertilizer industry
One of the purposes of proposed fertilizer use to achieve zero growth in 2020, while the value-added tax is levied fertilizer use market-oriented means to achieve these objectives
Recently, the Ministry of Finance and other departments issued "on the fertilizer recovery VAT policy notice." Since September 1, taxpayers sale and import of fertilizers, unified tax rate of 13 percent value-added tax, VAT exemption and refunded the original policy accordingly suspended.
Since 1994, China has successively on the production and circulation of domestic and imported varieties of chemical fertilizer, the implementation of the VAT shall be exempted or refunded in respect of protection of fertilizer supply, support agricultural production has played a positive role. But as the situation changes, the drawbacks of these policies increasingly apparent. "In the long run, this policy is not conducive to competition mechanisms play a role." Fertilizer known enterprises Kingenta [0.70% funds research report] Ecological Engineering Group Vice President Chen Hongkun told the "Economic Daily" reporters. He believes that the VAT increase will be modest fertilizer business costs, speed up the elimination of small-scale, outdated equipment, poor profitability of small and medium enterprises, help to optimize fertilizer industry competition, improve standardized operation of the fertilizer industry.
"Fertilizer food grain, fertilizer industry for the task of shouldering the steady insured .10 years ago, national security and to allow farmers from the agricultural point of view of the lingua franca of fertilizer, are exempt from VAT in order to reduce production costs." China Nitrogen Fertilizer Industry Association, concerned that, with the continuous development of the fertilizer industry, the problems will become increasingly prominent, such as fertilizer of varying quality, some enterprises shoddy, policy can not directly benefit farmers. Today, the fertilizer supply and demand relationship has changed dramatically. VAT recovery reflects the use of chemical fertilizers, "hand of the market" determination to regulate the industry also means that fertilizer is being transformed from a particular commodity to general merchandise.
Director of the National Agricultural Center and Fertilizer Monitoring Service, a researcher Li Rong said that countries propose the amount of fertilizer to achieve zero growth in 2020, one of the purposes of VAT is levied fertilizer use market-oriented means to achieve these goals. VAT is levied fertilizer recovery needs fertilizer market reform, the original fertilizer subsidies to some extent, encourage the backward production capacity.
After the recovery of VAT levied fertilizer companies, how will respond? "Short term raw material prices, product prices may be appropriate to rise, but with the full market competition, companies will enhance the technical level, to reduce costs." Chen Hongkun said, "In our business, it will further accelerate the transformation and upgrading. Increase science and technology research and development, improve the level of industrial technology and production efficiency, reduce production costs; increase of new fertilizer product development, improve fertilizer use efficiency and reduce the cost of farmers. "
Fertilizer costs go up, fertilizer expenses also increased if farmers do? Mr Li believes that VAT has a certain influence on the lower agricultural costs, but because the state has a comprehensive agricultural subsidies, and the implementation of dynamic adjustment and other institutional arrangements, even if some fluctuation in fertilizer prices, for normal agricultural production and farmers' income will not have a big impact. Meanwhile, the government can also use the more comprehensive agricultural subsidies and guide farmers to use organic fertilizer, and guide enterprises to agricultural services.