Tax Pressure On Cotton Textile Industry Profits, Textile Industry Hopes To Introduce More Support Policies

Recently, the state has issued a policy of raising the textile export tax rebate by 2%. Insiders believe that the tax rebate increase indicates that the state still supports exports of labor-intensive products, and a series of supporting policies may be introduced in the second half of the year.

　　税收压薄棉纺业利润

According to the current VAT system (implemented in 1994), the input tax rate of cotton textile enterprises in China (general taxpayer) is 13%, and the product sales tax rate is 17%. This means that even if the cotton textile enterprises do not realize the value added, they will sell the cotton purchased at the original price and bear the same tax, that is, the so-called "high tax and low deduction" policy.

The first textile network editor in chief Wang Cheng analysis said that the "high tax and low deduction" of value-added tax has a great impact on cotton spinning enterprises. Cotton textile enterprises main raw materials are cotton, and the cost of cotton accounts for about 70% of the total cost of production.

In addition, the advanced air-jet looms and automatic winder used by cotton textile enterprises have abolished the import value-added tax reduction policy since the second half of 2007, and the cost of technical pformation has increased by 17%, slowing down the pace of technological progress and industrial upgrading.