On May 24th, the China Wood and Wood Products Circulation Association submitted to the Department of Resource Conservation and Environmental Protection of the National Development and Reform Commission and the Ministry of Finance of the Ministry of Finance the “Proposal on Decreasing Consumption Taxes on Wooden Flooringâ€, recommending that relevant departments reduce wood floors. Consumption tax; study and formulate the wood industry's comprehensive utilization encouragement policy for the flooring industry to promote the rapid development of the industry.
First of all, this "Proposal" is still only a constructive opinion, and its proposal is targeted. It is mainly directed at solid wood flooring, solid wood composite flooring and solid wood finger grounding plates implemented by the Ministry of Finance and the State Administration of Taxation in 2006. The policy of levying a 5% excise tax actually includes solid wood trim panels that are used to decorate walls and ceilings on one side and are grooved. At the time, solid wood flooring was included in the scope of the consumption tax levy that was included with wooden disposable chopsticks. The policy intention was also obvious, namely, the consumption of pure wood products was suppressed and the environment was protected. The implementation of this policy has had a certain effect. It is clear that, starting from 2006, many powerful flooring manufacturers have begun to go out and buy forest resources from abroad, and some companies have incorporated the cultivation of fast-growing and high-yield forests into strategic plans to extend their production. Chain, improve business freedom. At the same time, some people in the industry pointed out clearly that even if the proposal is adopted, there is no guarantee that the industry will be able to rejuvenate. By contrast, the positive attitude of government support may be more important. In short, the validity of this "Proposal" remains to be tested in terms of time.
Second, in terms of the macro environment, China’s tax policy has not been satisfactory. The “super national treatment†of foreign-funded enterprises was not actually cancelled until 2010. Of course, the state is also stepping down the tax burden on companies. Not long ago, Hunan reported that it was issuing relevant “opinions†to reduce or exempt real estate taxes from difficult enterprises. The problem of heavy taxation in the "Proposal" is not a case of the flooring industry. It is a common phenomenon for SMEs. Well, if you just cancel or reduce the 5% of the original excise tax, the impact on the wood flooring industry may be limited. It is reported that in 2006, the price of wood flooring had risen in certain years before the implementation of the policy, but the increase was not due solely to an increase in the consumption tax, that is to say, from the consideration of price alone, the consumption tax has affected the development of enterprises. The impact is limited, and it may be more severe for small businesses. However, on the other hand, it also promotes the reform of major companies in the general direction. At the same time, the policies are ostensibly equal, but in fact they are all skewed, and they will be tilted toward manufacturers with high quality resources. Therefore, in the winter months, reducing the consumption tax has a certain role in promoting, but for the entire industry, the role should be limited.
Again, in the "Proposal", the issue of flooring products "insufficient domestic demand and blocked exports" was mentioned. At present, one-fourth of China's floor production depends on export sales. Why are companies keen on foreign markets? From the perspective of taxation, the state has a 9% export tax rebate support policy for reinforced flooring exports, but products sold in China need to pay a value-added tax of 17%, and taxation and support policies have a price difference of 26%. In addition, the intermediate link has consumed a lot of costs. Domestic suppliers have passed multi-level circulation and multi-level agents. The cost of merchandise distribution is as high as 25% or even higher. It is also necessary to enter the store for payment. Exports abroad are due to container shipping, ordering basically starts from 2,000 square meters of a cabinet, and domestic 200 square meters from the set of businesses also have, logistics costs are relatively high.
The lack of domestic demand is related to the downturn in the entire property market, while export resistance is related to the foreign trade environment. Last year, under the policy of stimulating the economy in various countries, the world economic growth was still good, and China’s foreign trade growth had a good foundation. However, since the fourth quarter of last year, the debt crisis in Europe has been aggravated, the world economy has begun to slow down, and external demand has weakened. At present, the debt crisis in Europe has not yet been completely resolved; the US unemployment rate rose in May, housing prices did not rebound, people questioned whether the US economy can continue to pick up in the first quarter; the Japanese economy is a weakness; India's economic growth is also decelerating. According to statistics from the Ministry of Commerce, compared with the 27.4% growth in foreign trade imports and exports from January to May last year, the growth in the first five months of this year has dropped by nearly 20 percentage points. The situation is not optimistic. Steady growth is an important task. In late October of last year, the U.S. Department of Commerce accepted the application submitted by the U.S. hardwood parity coalition and decided to launch an anti-dumping and countervailing investigation against China’s multi-storey wooden floor. In early December, the U.S. International Trade Commission initially ruled that China’s exports to the United States of America’s multi-storey wood flooring caused damage to the U.S. industry. At present, the US Department of Commerce has entered a substantial stage of anti-dumping and anti-subsidy investigations on multilayered wooden flooring exported to the United States. Most of the floor companies surveyed jointly responded positively. A large number of small and medium-sized flooring companies are concerned about the high costs of responding to the lawsuits. They also do not participate in the suit because of the uncertainty of the results of the respondent.
In terms of the export of floorboards, companies should appropriately divert attention and dig for gold in potential markets such as East Asia. They should strive for the European and American markets but should not rely too much on them. By reducing the consumption tax, the domestic floor consumption market can be stimulated to a certain extent. However, companies that do not work in terms of technology and management innovation will still have no power to face the cold winter. The saturation of the flooring market is a fact, and the elimination of integration is inevitable.
As we all know, China's solid wood flooring or engineered wood flooring is mostly exported to developed countries such as Europe and the United States. Domestic consumption is mainly composite flooring and laminate flooring. In addition, more and more companies are fought in the third world market. If the "recommendation" for stimulating consumption in the domestic floor market can be implemented, it will have a certain influence on the consumption pattern of the current floor in China. However, whether there is a big rebound in the consumption of solid wood flooring still needs further reaction from the market.
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