Chapter six hundred and ninety seventh new tax rate
After waiting for two months, the northern tax policy for companies selling products domestically has finally come out.
The income tax is 25%, plus the local income tax of 3%, which is 28%, an increase of 13% from the previous 15%.
As for enterprises that establish productive enterprises within special zones or urban economic development zones open to the outside world and export all their products, they still pay a 15% income tax.
To this end, Li Jianhui specially convened a high-level joint meeting of a number of manufacturing enterprises, including Taoda, Hongyu Clothing, Jingyi Electrical Appliances, Huihong, Jiehua Daily Chemical and other enterprises with production bases in the mainland.
In the conference room 306 of Xinjian Building, as Li Jianhui and Guan Jiahui took their seats, the meeting officially began.
"I believe you have also received the notification of the northern tax rate adjustment. Many of our products produced in the northern production base are not only exported overseas, but also sold in the northern market.
Now that the northern market has been adjusted like this, we need to reorganize the production base.
Register separate companies in the mainland, one for the production of products for export, and the other mainly for the production of products for the northern market. You all talk about your plans."
After Li Jianhui finished speaking, Xu Zhichao, president of Jingyi Electrical Appliances Group, immediately said: "Li Sheng, our Jingyi Electrical Appliances sales in the northern market have always been at the price of imported products.
This time the tax rate in the north is adjusted, we at Jingyi Electrical Appliances plan to have all northern products pass customs and postpone the establishment of a new production base specifically for domestic sales.
At the same time, we plan to increase our support for Aimei and Gaoyuzhou Jinque Electrical Appliance Group, which will focus on the mid-to-low-end market in the north."
Liu Qiulin, president of Hongyu Garment Group, said that the group's production base in Pengcheng is used for export overseas, and the planned production base in Yuzhou is used for the northern market.
Xu Hongfei, president of Taoda Group, is even more uncertain. Because it is a food and beverage group, its production base layout mainly serves the local market. This time, all production bases in the north will accept the new tax rate, and the products produced will basically be sold to the mainland market.
Huihong Group's Toru Iwatani plans to split the group's arcade and home game console production base in Pengcheng into two. Both companies have the ability to assemble and produce arcade and home game consoles. One company mainly exports, while the other company's products
Mainly used for domestic sales.
Jiang Jianming, president of Jiehua Daily Chemical Group, plans to establish a new production base in Shanghai. The Pengcheng base will be used for export, and the products in Shanghai will be used in the mainland market.
As the scale of its industries becomes larger and larger, Li Jianhui generally rarely interferes in the specific layout and development planning of the industry.
According to the latest tax rate in the north, there is not much problem with this layout, but Li Jianhui has some doubts about Jingyi Electric Group.
"Zhichao, although the sales price of our domestic products in the north is no different from the price of imported products.
But you have to be clear that our products can be sold domestically at the expense of not transferring profits for twenty years.
If Jingyi Electrical Appliances is all imported products, do you think it can maintain its market share in the northern market?
Is Jingyi Electrical Appliances ready to lose the northern market?
Can Jinque Electrical Appliances and Aimeigao Electrical Appliances fill the gap in the Jingyi Electrical Appliances market in time?"
Facing Li Jianhui's three consecutive questions, Xu Zhichao didn't panic at all.
"Li Sheng, I know that once our group makes this choice, the products will be affected by the foreign exchange factor in the north, and sales may decline significantly in a short period of time.
But we, Jinghua Electric, are not only the largest shareholder of Aimego Electric, accounting for 45% of the shares, but we are also the second largest shareholder of Jinqiao Electric, accounting for 49% of the shares.
Next month, the Pengcheng production base of Aimeigao Electric Appliances will be officially put into use. The second phase project of Jinque Electric Appliances Production Base has also come to an end and is expected to be officially put into production in March. The output of these two companies exceeds that of our Jingyi Electric Co., Ltd.
There is no problem at all in the market for lost electrical appliances.
Thanks to the assistance of our brother companies in recent years, our Jingyi Electrical Appliances technology has been greatly improved. Not to mention surpassing several top Japanese home appliance brands, it is definitely not far behind. We are fully capable of competing with them in the high-end market.
Moreover, Li Sheng should know that many families in the north have a special preference for imported products. These people do not care about price, but only care about face.
Starting next year, our group will gradually abandon the development and sales of mid- to low-end products and focus on taking the high-end route to strengthen its own brand.
The part that has been given up will be made up by Aimico Electric, Jinque Electric and even Datong Electric, and we will not suffer much loss."
There is another important reason that prompted Xu Zhichao to make such a decision, that is, there are too many home appliance companies under the Tung Wah Association.
Although the northern market is large, Jinque Electric is in the southwest, Aimeigao is in south China, and Datong Electric is in east China. This is enough. If Jingyi Electric continues to compete in the mid-to-low-end market, it will only be an internal fight.
In Xu Zhichao's plan, Jingyi Electric will be a technology research and development enterprise in the future, relying on technology to make money.
Especially large-scale central air conditioners, this is the next key project to be developed by Jingyi Electric. Although Jingyi Electric is far behind giants like Mitsubishi, with the support of Xinjian Department, he is confident that Jingyi central air conditioners can compete with Mitsubishi in the future.
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In fact, Li Jianhui is also aware of the disadvantages of having many similar companies under the Tung Wah Association. That is, the current local markets are large enough. Otherwise, they will all be trapped in the Xiangjiang market, not to mention foreign enemies, and they will be killed by themselves.
Since Xu Zhichao had a clear plan and could reduce competition among brother companies, he agreed with Xu Zhichao's layout of the mainland market.
"It is already mid-December, and there is not much time left for everyone. The production base in the north needs to make adjustments, and we must make adjustments quickly during this time.
In addition, Jingyi can seize the last ten days to do more activities in the northern market and reap the last wave of dividends."
…
After the meeting, Li Jianhui also communicated with Tung Wah Association members on the new tax rate.
The tax rate has increased, but the transfer of profits from domestic sales companies is still restricted. This will naturally cause dissatisfaction among many people, including many members of the Tung Wah Association, and even Li Jianhui's eldest brother Li Jianyang.
At a party in a private room of Xinhui Hotel, Li Jianyang said: "The reason why we foreign-funded enterprises agree not to transfer profits from domestic sales of products for a long time is because we value the 15% income tax.
And now the other party wants to be in line with most international and regional standards on our corporate tax rate, so why not be in line with international standards on our profit transfer.
Moreover, the other party is also talking about business with our Donghua Association. If we are suppressed in the future, they will not endorse us. So we don’t have to worry about human feelings. We cannot give up the benefits we should strive for. I think it is necessary to discuss this matter in the near future.
Negotiate with the North."
There are many people who support Li Jianyang's proposal, including Li Chunxue and Wang Shanbin, who also suggested uniting all parties to form a delegation to communicate with the north about the matter.
Li Guobao spoke up: "Jianhui, if it's not easy for us to come forward, maybe we can ask Gu Zhenfu, Lin Tingsheng, Wei Yingzhou and others to come forward to talk to the North. Relatively speaking, their concerns will be much less."
Li Jianhui also knew that there had been a lot of resentment within the Donghua Association for the past two months, and now that he was seizing the opportunity, he was naturally unwilling to give up easily.
To be honest, Li Jianhui has a lot of projects in the north, and there are many places where money is needed, so he really doesn't care whether the short-term profits can be transferred out.
The same is true for most members of the Tung Wah Association. Even if some have small investments, they can transfer RMB to Xinjian companies and get Hong Kong dollars from the Xinjian company.
This time I am afraid that it will be more serious or I just want to vent my anger, so I have such a proposal. Li Jianhui has no objection to this. Anyway, it will not have much impact on Chengdu if we don't talk about it.
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