The consumption tax on lead-acid batteries has finally been officially implemented!

The issue of battery consumption tax collection, which has been debated for more than two years, has finally been settled. On the 26th, the Ministry of Finance announced that batteries will be included in the scope of consumption tax collection, with an applicable tax rate of 4%; for lead-acid batteries, the collection will be deferred before December 31, 2015, but will be officially collected from January 1, 2016.

After the announcement was released, lead-acid battery companies expressed strong concerns.

First, the domestic market for lead-acid batteries is weak in terminal consumption, which is basically a buyer's market. Whether the consumption tax can be passed on is worth discussing;

Second, in 2014, my country's lead-acid battery exports increased by nearly 40% year-on-year, which was achieved under the premise of lowering prices and sacrificing profits. If a 4% consumption tax is imposed, my country's lead-acid batteries will face strong competition from Vietnam, India and other places, and it is still unknown whether the export market can be maintained.

Third, if the collection of consumption tax cannot be implemented on "three-no" enterprises, it will deal a greater blow to formal enterprises and the healthy development of the industry may be distorted.

It can be seen that if the consumption tax is actually implemented, it will have a great impact on the lead-acid battery industry. The news of the collection of consumption tax on lead-acid batteries first came out at the end of November 2012. At that time, the Ministry of Finance and others planned to collect 5% consumption tax on lead-acid batteries. By the end of 2013, the two ministries and commissions again proposed the collection proposal and actively negotiated with associations and enterprises. Although the determination to collect the tax was strong at that time, it was eventually shelved due to strong opposition from the battery industry. Enterprises said that their profits were already meager, and the collection of consumption tax was like the last straw that broke the camel's back.

However, the stalemate between the two sides was recently broken and the consumption tax was finally implemented, which shows the government's determination to protect the environment and adjust the industry structure.

There are still concerns about the sustainable development of the industry under forced levy

At present, the lead-acid battery industry is in the deep "winter" and deep "anemia" period, and few production enterprises have small profits and generally suffer losses, unable to bear the consumption tax. At present, there are about 200 lead-acid battery production enterprises with an output value of more than 5 million yuan in the country. According to the annual reports and sample surveys of enterprises, small-profit enterprises account for 32% of the industry, with a profit margin of 1-2.5%; 136 loss-making enterprises account for 68% of the industry's enterprises, with a total loss of 1.05 billion yuan. Among them, Tianneng and Chaowei Group, two industry leaders that account for 80% of the national power battery market share, lost 300 million yuan and 28 million yuan respectively, accounting for about 31.75% of the industry's losses.

From the perspective of policy content, not all batteries are included in the scope of consumption tax collection. From the current scope of taxation, the state mainly imposes consumption tax on some polluting batteries from the perspective of environmental protection, while exempting mercury-free primary batteries, nickel metal hydride batteries, lithium primary batteries, lithium-ion batteries, solar cells, fuel cells and all-vanadium liquid flow batteries from consumption tax, which also reflects the trend of the state supporting environmental protection and promoting the development of new energy batteries that meet the needs of industrial development.

For the lead-acid battery industry, consumption tax will increase corporate costs to a certain extent, and companies may pass on the costs to consumers by raising prices. In the past, lead-acid batteries accounted for a large share of the entire battery market, while the lithium battery market was relatively small. After the consumption tax is levied, the price advantage of lead-acid batteries will be slightly reduced, which will also make new batteries such as lithium batteries more competitive in the market, promote market competition, and accelerate industry reshuffle.

Due to the upgrading of technology and equipment and increased investment in environmental protection facilities by my country's battery companies in recent years, corporate profits have been minimal, with net profits even being only around 1.5%-3%. The imposition of battery consumption tax under the circumstances of already small profits is undoubtedly a heavy blow to the entire industry. At present, there are about 2 million employees in the battery industry, and the survival situation in the future will be even more severe.

At present, the main pollution sources in the lead-acid battery industry are still concentrated in informal small enterprises and workshops, and there are also a lot of tax evasion in the operation process. For some illegal small enterprises, the collection of consumption tax is equivalent to artificially increasing the price difference between tax-free batteries and tax-included batteries, which expands their living space and increases the concentration of the industry.

Therefore, the introduction of a consumption tax on batteries will further squeeze the living space of formal enterprises. Compared with small workshops, formal enterprises will be at a competitive disadvantage in terms of price, and may even see the phenomenon of "bad money driving out good money".

Urgent need to reconstruct the public's understanding of the lead-acid battery industry

The country imposes consumption tax on the battery industry, mainly out of consideration for environmental protection. From the perspective of development, the original intention of not sacrificing resources and the environment is good. However, most people still have certain misunderstandings about the lead-acid battery industry, believing that it is a highly polluting industry.

In recent years, with the continuous development of technology, the emergence of advanced lead-acid batteries such as wound batteries, carbon fiber batteries, and lead-carbon batteries has improved the performance of lead-acid batteries. These new lead-acid battery technologies are stable and reliable, and will be an important way of energy storage in the future, and will also promote the application of new energy industries.

Since the promulgation of the "Access Conditions for the Lead-acid Battery Industry" in 2012, the environmental protection level of my country's lead-acid battery industry has been significantly improved. Through the rectification of backward environmental protection facilities, backward production capacity, and sanitary protection distances at factory sites that do not meet the requirements, the survival of the fittest in the industry has been basically completed. The actual operation quality of clean production in my country's lead-acid battery industry has been aligned with the advanced standards of international peers, and the pollution problem in the lead-acid battery industry has been basically solved; after the lead-acid battery is scrapped, it can be recycled and smelted to obtain a lead reuse rate of more than 99%. my country recycles about 1.5 million tons of waste lead annually, accounting for about 30% of the annual lead consumption, which is in line with the concept of circular economy.

Internationally developed countries have not imposed consumption taxes on lead-acid batteries, nor do they classify lead-acid batteries as polluting industries. Instead, they are a government-supported, recyclable, green and environmentally friendly industry.

At the same time, lead-acid batteries can be subdivided into many categories, but the current taxation regulations do not differentiate between them. This has resulted in many newly developed high-tech lead-acid batteries in recent years also being subject to a 4% consumption tax. my country's battery industry is undergoing a comprehensive transformation. If the consumption tax is fully levied, it will hinder the development of formal enterprises and the research and development of new battery products.

In the process of collecting battery consumption tax, the state should classify and collect taxes on newly developed products to encourage the development of advanced technologies. At the same time, it should strengthen the management of informal enterprises and promote the healthy and orderly development of the battery industry.

The imposition of consumption tax on batteries highlights the lack of legislation in the industry

As economic development enters a new normal, the intensity of industrial restructuring continues to increase, and some new industries and sectors have emerged one after another. Enterprises may enter some new fields and new formats in the process of transformation and upgrading. If there are no perfect laws and regulations to regulate and constrain these emerging fields and industries, enterprises will not be able to successfully complete transformation and upgrading.

Some industry insiders believe that the imposition of consumption tax on the battery industry is a typical example of the absence of legislation. Government departments should administer according to law and take the legislation of the National People's Congress as the fundamental basis for administration. In the absence of legislation, the imposition of consumption tax on the battery industry will be detrimental to the development of the battery industry.

At the same time, industry insiders also believe that the collection of consumption tax on lead-acid batteries is to solve environmental problems and should be included in the Environmental Protection Law, not the scope of consumption tax policy.