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Assettrader Looks With Optimism At China’s Vat Reform Last week, the Chinese media announced VAT rate cuts triggered by the Government’s latest tax reform. AssetTrader believes this fiscal change will encourage start-ups and SMEs to go green by purchasing used equipment rather than new.Last week, the Chinese Government has announced an extension to its VAT reform to all industries from 1st January 2009, thus reducing the tax burden on businesses by more than 120bn CNY (17.6 bn USD) next year. The scope of this reform is to trigger a shift from the existing production-based VAT regime, to a new consumpion-based one. As a result, the country is expected to experience economic growth despite the current difficulties that are challenging global economy: companies would be encouraged to upgrade their technology, domestic demand would increase, and industrial restructuring would be facilitated. The VAT rate cuts affect every type of business: for example, SMEs value-added tax is reduced to a universal 3% from 6% for industrial firms and to 4% for commercial companies. How will this fiscal reform influence the growth of Chinese companies? According to online marketplace AssetTrader, the State Council’s decision is likely to encourage company owners to invest more on their business by purchasing fixed industrial assets. Besides, AssetTrader firmly believes that companies located in the Chinese Republic should consider buying used items rather than new. In this way, SMEs and new ventures can be presented with the double advantage of alleviating the effects of the recession by cutting costs, and helping the environment by reducing carbon footprints. Buying new equipment could cost companies thousands of pounds in storage and depreciating costs, especially when the items go unused for more than 50% of their work span. Besides, recent studies have shown that manufacturing and disposal of new equipment is one of the major contributors to increased CO2 levels in the atmosphere. CEO Paul Holladay explains: “We feel that some companies may be deterred from purchasing used equipment, even at a reduced cost, because of unknown maintenance needs and expired warranties. By reducing the VAT rate of the purchasing and sale of these items, more businesses will be encouraged to take the green option. Even if generally considered an environmentally sound and cost-effective practice, until recently the buying and selling of used corporate and industrial assets was seen as a slightly suspect affair. For example: it has always been difficult to trust the broker you want to buy a motor grader from, or the purchaser of your under-used IT equipment. We feel that by bringing the buying and selling of every type of commercial and industrial asset under one roof, and using a vetting process for all buyers and sellers we have provided a legitimate business forum in which many more companies can easily go used rather than new.” China has often been criticized at an international level for its insufficient environmental policies. However, the Chinese Government has recently began to acknowledge that the country’s patterns of energy consumption and industrial production are not sustainable, thus embarking on a series of domestic and international programmes to reduce the impact on the environment. By purchasing good quality equipment on the used market, Chinese agricultural and construction businesses can help the government achieve its environmental targets. AssetTrader hosts a database of machines available for sale from China and other countries at http://www.assettradernet.com # # # About AssetTrader With over 5000 registered users, AssetTrader is a leading online trading hub for used and new business equipment. It holds a regularly updated inventory of agricultural, manufacturing and construction machinery available for sale from major dealers and private sellers through to original equipment manufacturers. Headquartered in London, UK, AssetTrader brings together traders from the USA, Europe, Latin America and Asia. For more information on AssetTrader, please visit www.assettradernet.com |
Select Latest Press Releases November 2008October 2008 TODAY'S TRADING
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