By Chang Jiwen, Research Institute of Resources and Environment Policies, DRC; Xu Junxiang, Yu Keli, Feng Yuxia & Chen Weixing, China National Resources Recycling Association

Research Report, No.284, 2021 (Total 6349) 2021-9-24

Abstract: At present, China’s renewable resource recycling industry is in an urgent need of transformation and upgrading. However, impacted by the current policies, recycling enterprises lack the access to value-added tax (hereinafter referred to as VAT) deductions, and the scope of tax incentives for processing is relatively narrow, making it hard for tax incentives be transformed from the processing and utilization links to recycling link, which leads to the high costs in recycling and utilization and the weak attraction to draw in capitals for further development. Currently, the relatively large differences between local taxation policies and the unfair market competition environment have severely restricted the sound development of the industry. With regard to the above-mentioned issues, this paper notes that we need to refine China’s current taxation policies on renewable resource industry, make trials with scrapped motor vehicles and waste electrical appliances as recycling objects, and enhance taxation incentives for the comprehensive resource utilization; we need to ensure the authenticity and reliability of data and the traceability and controllability of supervision by promoting the informatization of recycling industry and bringing into play the role of modern information and technological methods such as the third-party online payment, block chains, visual logistics, enterprise resource planning system (ERP) and otherwise; we need to explore the establishment of a public service platform for renewable resources based on the informatization of supply chain and crack the tough nut in terms of taxation policy faced by China’s renewable recycling industry, which hinders its sound and healthy development.

Keywords: renewable resource, comprehensive utilization, taxation, value-added tax (VAT), income tax