What Is a Consumption Tax?

Consumption tax / Excise Duty (special goods and labor tax) is a collective term for various taxes that are levied on the turnover of consumer goods. Taxes imposed by the government on consumer goods, which can be collected from wholesalers or retailers. Consumption tax is a typical indirect tax. Consumption tax is a new tax newly established in the turnover tax in the 1994 tax reform. Consumption tax is in-price tax, which is only paid in the production, commissioned processing and import of taxable consumer goods. In the future, such as wholesale and retail, because the price includes consumption tax, there is no need to pay consumption tax. The tax is ultimately borne by consumers. . Consumption taxpayers are units and individuals that produce, commission, process, retail, and import taxable consumer goods as stipulated in the Interim Regulations on the Consumption Tax of the People's Republic of China.

The taxpayers of consumption tax are domestic production, commissioned processing, retail and import.

1. Consumption tax taxation items are selective. Consumption tax is based on specific products specified in the tax law.

Consumption tax is generally levied on goods

Consumption tax payment obligations occur:

Except that the time when the tax liability for processing entrusted is a specific requirement of consumption tax, the time when the tax liability for consumption tax occurs is basically the same as that for value added tax.

GST tax location:

Taxable consumer goods sold by taxpayers, as well as taxable consumer goods produced for their own use, shall report tax to the tax authority in charge of the taxpayer's place of accounting, unless otherwise provided by the State Council.

In addition to entrusting the processing of taxable consumer goods, the trustee shall collect and pay the consumption tax on behalf of the local competent tax authority. For taxable consumer goods that are entrusted to process by individuals, the entrustment shall report to the competent tax authorities of the place where the institution is located or where they live.

Imported taxable consumer goods shall be subject to tax declaration by the importer or its agent to the customs at the place of declaration.

Where a taxpayer sells or entrusts a foreign county (city) to sell self-produced taxable consumer goods on behalf of a taxpayer, after the taxable consumer goods are sold, the taxpayer shall report to the competent tax authority where the institution is located or where he lives.

If the taxpayer's head office and branch office are not in the same county (city), they should declare taxes to the competent tax authorities (except for cigarette wholesale) where they are located; with the approval of the Ministry of Finance, the State Administration of Taxation or their authorized financial and tax authorities , The head office may report to the competent tax authority where the head office is located for tax collection.

The scope of the consumption tax includes five types of products:

The first category: some excessive consumption will cause harm to human health, social order, ecological environment and other special consumer goods, such as tobacco, wine, firecrackers, fireworks, etc .;

The second category: luxury goods, non-necessities, such as precious jewelry, cosmetics, etc .;

The third category: high energy consumption and high-end consumer goods, such as cars, motorcycles, etc .;

Fourth category: non-renewable and alternative petroleum consumer products, such as gasoline,

Excise

Foreign trade enterprises with export operation rights are exempt from export tax and rebate;

Productive enterprises with export operation rights export by themselves or entrust foreign trade enterprises to export on their behalf.

Exports of taxable consumer goods by other business enterprises are not exempt or refundable;

1.

Consumption tax is levied based on the turnover of specific consumer goods.

Consumption tax is an indirect tax levied on specific goods and services. In its essence, it is a special goods and services tax, not a tax levied specifically on retail (consumption) links. The "consumption" of consumption tax is not the "consumption" of purchasing goods or services in retail. In addition to raising fiscal revenue, consumption tax can regulate consumption behavior, promote energy conservation and environmental protection, correctly guide consumer demand, indirectly guide investment flows, and compensate for negative externalities of some commodities and consumption behaviors to ease income in accordance with the requirements of national industrial and consumer policies. Unfair distribution. ^[1]

At the National Financial Work Conference held a few days ago, Lou Jiwei said that, in the current and future period, in the reform of the tax system, we must accelerate the pace of reform of business reform, increase resource tax reform, adjust and improve the consumption tax system, and accelerate the real estate tax legislation Promote reforms in a timely manner and actively and steadily advance other tax reforms.

As an important starting point for structural tax reductions, in 2013, the pilot reforms of business reforms in the transportation industry and some modern service industries have been launched nationwide, reducing the corporate tax burden by about 140 billion yuan. Liu Shangxi pointed out that the increase in battalion reform will definitely continue to advance in 2014.

In response to some other tax reforms, Liu Shangxi said that resource tax and consumption tax reform may really start in 2014. And real estate-related tax reforms, such as land value-added tax, urban land use tax, farmland occupation tax, and property tax, need to be comprehensively and uniformly considered. It is difficult to say that all reforms will be in place in 2014. Regarding how to solve the problem of local government debt, Liu Shangxi said that the most important thing is to improve the transparency of local government debt. In addition, the local finance must establish a fiscal responsibility mechanism in the jurisdiction, and the upper level must supervise the borrowing of the lower level government. ^[5]

The consumption tax system was formally established in 1994.

Adjustment of consumption tax in 2006

From the late 1970s, consumption tax was the subject of most concern in Japanese politics. Prime Minister of Japan in 1978

On January 12, 2015, the Ministry of Finance issued the "Notice on Continued Increase of Consumption Tax on Refined Oil". The notice said that in order to promote environmental governance and energy conservation and emission reduction, the unit tax of gasoline, naphtha, solvent oil and lubricants will be increased from 1.4 yuan / liter to 1.52 yuan / liter. ^[9]

Recently, the Ministry of Finance and the State Administration of Taxation jointly issued the Notice on Levying Consumption Tax on Batteries and Coatings (Caishui [2015] No. 16). Since February 1, 2015, a consumption tax has been imposed on batteries and coatings. And import, the applicable tax rate is 4%.