Impact Of VAT Rate Reduction On Chinese Pharmaceutical Manufacturing Industry

In recent years,China's VAT reform is actively responding to the call for "Healthy China 2030".From 1994 to 2019,China's value-added tax has undergone three stages of transformation,expansion,and adjustment.During the tax rate adjustment period(2017-2019),China's VAT tax rate mainly changed three times: the first time After July 1,2017,the tax rates became 17%,11%,6%,and 0%;for the second time after May 1,2018,the tax rates became 16%,10%,6%,and 0%;Three times after April 1,2019,the tax rates became 13%,9%,6%,and 0%.The report of the 19 th National Congress of the Communist Party of China has stated that it is necessary to accelerate the implementation of Healthy China as the current development strategy.The pharmaceutical manufacturing industry,as an industry that maintains people's lives and protects their health,has been favored by national policies in recent years.Due to the delayed update of official data,the analysis of the Secondary industry in this article when studying the changes in VAT income and tax burden is as of 2017,and the analysis of pharmaceutical manufacturing is as of 2016.On the basis of explaining the current status of VAT taxation in China's pharmaceutical manufacturing industry,taking15 domestic large pharmaceutical companies as examples,and taking their financial audit reports for 2017 and 2018 as research data,the research on the reduction of VAT tax rate will be our medicine What are the impacts of financial indicators such as cost-benefit,various expenses,and cash flow of the manufacturing industry? Based on this,specific reference recommendations are summarized.The research conclusions of this paper are:(1)Vertically,from 2007 to 2016,the contribution of China's pharmaceutical manufacturing industry to the total value-added tax of the manufacturing industry increased year by year,and its VAT tax burden has generally continuedto decline since the end of the transformation in 2009.Trend,but the degree of burden reduction is much smaller than that of manufacturing.Horizontally,the VAT burden of the pharmaceutical manufacturing industry is still relatively high compared to other industries in the manufacturing industry.(2)On the premise of ignoring external factors and unchanged tax-included prices in the contract,the reduction of tax rates will increase the revenue and costs,sales expenses and management costs of the pharmaceutical manufacturing industry,reduce VAT taxes,but do not change the cash In and out.(3)On the premise of ignoring external factors and the price of the tax-excluded contract is unchanged,the reduction of the tax rate will reduce the cash inflow and cash outflow of the pharmaceutical manufacturing industry,reduce the VAT tax burden,but affect income and costs and various expenses no effect.The countermeasures and suggestions in this article are as follows:(1)It is recommended that the government continue to consolidate tax rates,improve tax incentives for veterinary drugs,Chinese medicine raw materials,and medical devices,and upgrade tax service measures.(2)It is suggested that large pharmaceutical companies should respond to policy adjustments in multiple ways and channels,and conduct reasonable tax planning in the sales,procurement and related expenses.