【ferro-alloys.com】

  "In recent years, although domestic iron mining enterprises have improved their comprehensive strength by vigorously promoting scientific and technological innovation and paying close attention to fine management, their international competitiveness is still relatively weak due to heavy cost burden and other factors." Xie Shengrui, deputy to the National People's Congress and shift leader of HUASHUGOU mining area of Gansu Jiugang Jingtieshan Mining Co., Ltd., said during the fourth session of the 13th National People's Congress, "considering the policy orientation of tax reduction and fee reduction proposed by the state, it is suggested to reduce the value-added tax burden on domestic iron mining enterprises, so as to ensure the strategic safety of iron ore industry and promote the sustainable development of iron mining enterprises."

  Xie Shengrui pointed out that at present, domestic mining enterprises have low grade of mineral products, heavy tax burden and lack of competitiveness. When the general industrial enterprises collect the value-added tax on their products, the input tax deduction of purchased raw materials is large, and the paid in value-added tax is relatively small. In the process of mine investment and construction and iron ore production, mining enterprises spend a large amount of money on purchasing land and intangible assets of mining rights, and the income from the transfer of mining rights and land use right fees can not be deducted according to the current policy. Although these expenses are similar to the expenses for enterprises to purchase fixed assets, they are all paid to the government and cannot be deducted from the input tax because they cannot obtain the special VAT invoice. In the production process of mining enterprises, there are few purchased materials, only a small amount of support and blasting materials, etc., and the input tax that can be deducted when paying VAT is very small. Take 2016 as an example, the value-added tax burden rate of domestic key large and medium-sized iron mining enterprises is more than 7.5%, which is 3-5 times of that of other industries in the same year (the data of other industries in the same year are from the National Bureau of statistics, and the Bureau of statistics will not publish the value-added tax burden of other industries after 2016). At present, domestic iron mining enterprises need to pay a total of 24 taxes, mining right income and land acquisition fees. All taxes and fees account for about 16% of the main business income, forming a greater pressure on enterprise costs.

  In this regard, he suggested that:

  The first is to reduce the tax burden of iron mining enterprises, expand the scope of value-added tax deduction of mining enterprises, and allow the value-added tax deduction of land reclamation cost, geological environment protection and restoration fund, mining right transfer income, land acquisition cost and water and soil conservation compensation fee according to the annual amortization amount; the collection of mining right equity fee is adjusted to be calculated and collected according to the amount of ore mined; and the mining law should be amended as soon as possible The Interim Measures for the collection and management of the proceeds from the transfer of mining rights (CZ [2017] No. 35) can effectively safeguard the legitimate rights and interests of the mining right holders. The market benchmark rate of the proceeds from the transfer of iron ore mining rights and relevant management measures should be issued as soon as possible. For large iron ore mining enterprises, the return rate of the transfer of iron ore mining rights should be collected to ease the financial pressure of enterprises.

  The second is to further improve the investment environment of mines, encourage enterprises to reinvest in iron ore resources by using the profits of that year, and reduce income tax.

  The third is to introduce the differential management policy of mining land, especially open-pit mining land, and bring the mining land into the scope of temporary land management; if it needs to be approved as permanent construction land, it will not occupy the scale of construction land and the annual plan index. The government will standardize and integrate the fees collected by the government for resource development, ecological restoration and management into a comprehensive management and restoration fee.

  Fourth, further simplify the examination and approval procedures of 50% resource tax reduction for mining low-grade iron ore, actively assist enterprises to enjoy national preferential policies, and reduce the tax burden of enterprises.

• [Editor:Catherine Ren]