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State Council follows up with improvements in write-offs for enterprises

Updated: Jan 14,2019 4:15 PM

The press office of the State Council held a briefing on Jan 10 with Ma Zhengqi, deputy head of the State Administration for Market Regulation, and the concerned senior officials of the State Taxation Administration, casting light upon the current status of the simplified write-off procedures for enterprises.

Market entities had reached 110 million by the end of 2018, including 34.74 million newly-added enterprises. The figure for 2019 is 21.5 million and 6.7 million to date, Ma said.

According to The Doing Business Report 2019 released by the World Bank, China ranked 46th in business environment, moving up 32 places. For procedures to start a business, the whole process was streamlined into four steps and the previous 22.9-day time frame shortened to 8.6 days.

Based on related statistics, five industries predominated over the cohort of the written-off enterprises in 2018, which were wholesale and retail, leasing and commercial services, manufacturing, scientific research and technological services, and construction.

The arduous write-off procedures for enterprises, Ma said, still call for further efforts. Premier Li Keqiang recently urged departments concerned to clarify work mechanisms, optimize procedures, and address thorny problems.

The State Administration for Market Regulation, along with other departments concerned, held a symposium discussing issues related to write-offs for enterprises in respective regards.

Meanwhile, in response to typical cases raised by the general public, the State Administration for Market Regulation and State Taxation Administration conducted inspections in 15 provinces and cities for troubleshooting.

Additionally, the State Administration for Market Regulation also held expert workshops to pin down feasible approaches to streamlining write-off procedures.

Before enterprises kick-start the write-off procedures, they have to sort out issues related to rights and obligations across the board, including debt payment, staff wages, and more. Given the complexity of the work to be done, the write-off procedures are supposed to proceed with efficacy with all due work properly concluded, Ma said.

As the social credit system is being built, some enterprises could not solve their leftover problems, and some are troubled with missing business licenses or credentials and disputes among shareholders, which prolonged their write-off procedures. In addition, the relatively complicated nature of administrative management contributes to the situation.

In terms of the difficulty in write-off procedures, requirements for various documents and the time-consuming process came as the most pressing matters. Additionally, the system of one-off notifications should be better implemented.

Referring to that, the State Administration for Market Regulation drew up a circular on propelling the simplified write-off procedures for enterprises by joint efforts with the Ministry of Human Resources and Social Security, the Ministry of Commerce, among others, Ma said.

According to the circular, improved administrative services, facilitated by inter-departmental information sharing and business collaboration, will crack down on discredited enterprises and promote structural optimization of businesses.

Apart from simplifying the write-off procedures, streamlining work in taxation, social insurance, commerce and more should come in place as well. In the meantime, an exclusive online write-off platform will be widely applied.

Rao Lixin, director of the Tax Collection and IT Administration Department of the State Taxation Administration, said that the State Taxation Administration issued a circular on simplified write-off procedures on taxation, which proved highly efficient in practice.

A system of commitment will allow five types of tax payers — those who have good credit, short-term operation, small scales and more to wrap up the taxation write-off procedures as long as they meet certain rigid requirements, including no delayed payment of taxes, Rao said.

With afore-mentioned measures taken, the time frame of write-off procedures will be shortened by at least one third.

Referring to the reform of the write-off procedures as a whole, Ma said that there were three points worth noting — an integrated online write-off platform and streamlined procedures, as well as strengthened administrative guide for enterprises.

In addition, foreign-owned enterprises will equally enjoy convenience ushered in by the write-off reform.