On February 15th, as the third largest tax type in China, the reform of consumption tax may make a breakthrough this year. As of February 13th, seven provinces including Tianjin, Hunan, Guizhou, and Shaanxi have recently stated that they will undertake the tax reform tasks deployed by the state, implement the relocation of the consumption tax collection process for some items, and implement local reforms. Due to factors such as tax collection capacity, the progress of consumption tax reform represented by “tobacco, alcohol, oil vehicles” has been slow. Recently, the State Council issued the “Opinions on Promoting the High Quality Development of Finished Oil Circulation”, proposing to improve the cross departmental supervision mechanism of finished oil circulation and strengthen the supervision of key areas of finished oil circulation. The interviewed experts generally believe that this provides a institutional basis and policy environment for the post tax collection of refined oil consumption tax, which means that the reform process may accelerate. Regarding whether the reform will trigger an increase in oil prices, the interviewed experts judged that although there is a possibility of tax burden shifting to drive up oil prices after the implementation of tax collection and management, factors such as market competition and changes in consumer demand will also have a restraining effect on prices. (Securities Times)
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