Shanghai Logistics Cos. May Get Tax Rebates


Logistics enterprises in Shanghai which pay more taxes under a new pilot program of paying the value-added tax (VAT) instead of the business tax, will get tax rebates, according to an unnamed source, China Securities Journal, citing industry insiders.
Companies in a number of sectors in Shanghai are in the process of transiting into a new system of paying the VAT instead of the business tax, and some of these enterprises have said the pilot program increased their tax burden.
According to a survey of 65 large logistics companies in Shanghai conducted by the China Federation of Logistics and Purchasing, the average effective tax rate during the 2008-2010 period was 1.3 percent, while the rate for companies in the cargo transportation sector was 1.88 percent.
After the launch of the pilot program, these companies had to pay a VAT rate of 4.2 percent.
According to a notice published by related authorities in Shanghai on March 2, companies facing a higher tax burden will get  temporary fiscal support.


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