Since the enactment of the "Corporate Income Tax Law" in March 2007, over the past decade, China's corporate income tax rate has been implemented at a rate of 25%, and high-tech companies have implemented a 15% rate of income tax. However, a significant change had occurred both in domestic and international economic. The current corporate income tax has caused greater burdens on enterprises.

At this year's National People's Congress, Nie Pengju,  representative of the National People's Congress and the Chairman of Hunan Keli Motor Group Co., Ltd., suggested that the corporate income tax rate be reduced to 17% and the high-tech corporate income tax rate be reduced to 13% Expenditure on production equipment for imported products is subject to a one-time deduction of 150% before corporate income tax.

Nie Pengju believes that the current corporate income tax rate is not conducive to corporate financing. According to the survey, whether it is financing from bank loans or financing through equity or debt in the capital market, the company's net profit is a very important measure. The general corporate income tax rate of 25%, corporate income tax directly affects the company's profit statement, so that the company's financial indicators are greatly discounted, is not conducive to corporate financing, is not conducive to expansion and reinvestment of enterprises.

The current corporate income tax increases the corporate burden. According to the survey, a high corporate income tax rate reduces the company ’s return on investment. In recent years, China ’s labor cost dividends have gradually disappeared, but corporate income tax has not been reformed, increasing the corporate burden the willingness of enterprises to invest. It is not conducive to China's economic development.

The current corporate income tax rate hinders the international competitiveness of enterprises. According to the survey, in the past ten years, 33 of the 36 OECD countries have lowered their corporate income tax rate. Most of the OECD countries are representative developed countries in the world. In 2016, the United Kingdom approved the reduction of corporate income tax rate policy and reduced the corporate income tax rate to 17%. In 2017, the United States undertook the largest tax reduction reform in history. Corporate income tax rate reduce sharply from a cumulative tax rate of 35% to a single tax rate of 21%. Statistics show that the Russian corporate income tax rate is 20%, Switzerland is 18%, Singapore is 17%, HongKong China is 16.5%, all lower than China's current 25% tax rate. In the context of the era of globalization, if we do not  reform corporate income tax, it will hinder the international competitiveness of enterprises.

Nie Pengju said that since the implementation of the tax and fee reduction policy, the VAT reform has been the main focus, but the corporate income tax reform has not been touched. It is recommended that relevant ministries and commissions formulate a more complete corporate income tax system to effectively reduce the burden of enterprises.

The reduction of corporate income tax rate from 25% to 17%, high-tech enterprise income tax rate from 15% to 13% would  reduce the burden on enterprises, increase the return on investment of enterprises, increase the investment willingness of enterprises, and further optimize business environment.

A one-time deduction of 150% before corporate income tax is imposed on production equipment that produces highly sophisticated and substitute imported products. To encourage company research and development, a one-time deduction of 150% before corporate income tax is imposed on production equipment that produces sophisticated and alternative imported products, so as to increase the company's enthusiasm in scientific research, improve China's scientific and technological strength, and get rid of "stuck in the neck".

References:
https://hn.rednet.cn/m/content/2020/05/22/7284186.html?from=groupmessage&isappinstalled=0