When the industry is deeply anxious of the delayed The Development Byelaw of Software and Integrated Circuit, the deputies of the National People's Congress advise during the National People's Congress.
"According to the strength, the development of core product and key technology of China's software industry is still slow, the efficiency of software enterprises is low, the level of the application software of the industry with the most demands is low, and it depends on the foreign countries." It is said by Sun Pishu at a recent interview, "Therefore, the software industry of China is still in the initial period of growth, the nation will continue to give support in order to lead the national software industry to get on the road of independent innovation, so as to avoid being manipulated by others at certain times."
The 18th Document is an important supporting policy of nation to the development of national software industry. Since the document was published on June 24, 2000, it has mobilized the enthusiasm of all sides and made the industrial development into a fast line. However, this policy will be end in 2010, how to make the next policy will affect the development of software enterprises and industry.
Tax rebate ratio is the focus.
Wang Wenjing said, "The software industry needs longer-term support."
"At present, the problem of insufficient profitability in China's software industry exists. The sales income of software industry in 2006 is 480 billion Yuan, the industry profit margin is only 8.8%, if there is no support of value-added tax preferential policy, the profit of software industry in that year would be negative, and most of enterprises would be in a loss-making status." Said by Sun Pishu, "For the change of The 18th Document after the expiration, people will generally concern about the adjustment of tax proportion, this relates to finance, taxation, customs and other coordination problems of government, there will be a certain degree of difficulty to implement."
The Chapter III Article 5 of The 18th Document stipulates to those taxpayers who have their own developed and produced products, before 2010, the value-add tax is according to 17% of the statutory tax, to the actual tax more than 3% will be levy and withdraw, the enterprises will use this money to research and develop software product and extend the production. The Article VI prescribes that the software enterprises in China can enjoy the preferential policy of corporate income tax. After certification, the newly established software enterprises can enjoy the preferential policy of "Two Exemptions and Three Halved" since the year of getting profit.
The policies of value-added tax create a favorable policy environment to the development of national software industry. In these 7 years, it achieves the annual growth rate of development of 30%, till 2007, China's software industry income has reached 580 billion Yuan, with more than 600 national standards and industry standards.
In light of this situation, Mr. Sun put forward three proposals: First, the related department should study and formulate the follow-up policy of supporting software and information service industry by learning from the good points in The 18th Document to perfect and let the follow-up document can really play the role of promoting the software products with intellectual property rights, as well as supporting the growth of software service outsourcing export, thus it can change the structure of China's foreign trade export and enhance our software industry; Second, keeping the policy in The 18th Document, the independent software products pay 3% of the value-add tax, if the national value-added tax policy changes, the software products can be regarded as software services, and pay the tax as service industry, as well as enjoy the preferential policy of software service industry; Third, the software industry can transform from a pure product shape into software product with software services, this can make the new businesses in developing software industry such as IT consulting, solution, system integration, software outsourcing ,software testing, digital content, animation games, network services and other non-production software services into the supporting scope, the sales tax of those services can be prevented, and they can get protection and promotion, so as to promote the sustainable development of the software industry.
The reporter has learned that there are 5 to 6 deputies of NPC from the business world are concerning about the adjustment of The 18th Document, they may propose jointly.
Suggest the government departments to coordinate.
The official from the Ministry of Information Industry says that recently, China's software and integration industry is in a critical period of development, the sustained policy is indispensable, but the existing encouraging industry policy of software and integration industry's development is still not perfect enough, there is another problem of the existing policy, we need to constantly improve the relevant policy while implementing the existing industrial policy, as well as enhance the support to the software and integrated circuit industry.
"The 18th Document" started from the national "Ten Five-Year Plan", during the "Ten Five-Year Plan", the related departments have integrated 3 billion Yuan to provide support to software industry for independent innovation. The Ministry of Information Industry has enhanced the support to software enterprises by electronic development fund, and has organized some R & D for operating system, database, middleware and other large projects; this has led the capital investment of the government and enterprises. The operating sytem and database software with independent intellectual property rights have been successfully developed.
As to the value-add tax support policy in the document, the United States and other countries have raised many questions in the name of violating WTO principles. In July of 2004, China and the United States have signed a memorandum of understanding in Geneva, China has promised to amend the relevant provisions of document and adjust the value-added tax rebate policy, the national related departments has begun to constitute "The New 18th Document".
At the beginning of 2007, the management department of the Ministry of Information Industry disclosed that the national related ministries and commissions were organizing and establishing "The New 18th Document", in order to further promote China's software and integrated circuit industry can develop persistently, rapidly and healthily, as well as enhance the industrial independent innovation capability and core competitiveness and promote the readjustment of the industrial structure and optimization and upgrading.
Another industrial policy ¨C Software and Integrated Circuit Industry Development Principle brewed by MII has been included in the second category legislative plan in 2006. Recently, Doctor Qiu Shanqin, who is the assistant director of software and integrated circuit center of the MII has pointed out that, "At present, the general framework has been established; the principle will enhance the support to the industry."
According to Qiu Shanqin's introduction, the principle will cover the original "The 18th Document", and there are also some differences between them. The biggest difference of them is the adjustment of tax preferential tax policy. To different types of taxes, the value-added tax will not enjoy the tax rebate policy, but adopt the support policy such as special supporting fund to enhance the support to semiconductor enterprises; the export tax part can still enjoy the preferential policy of tax rebate; but the enterprises' income tax will be changed into be free in the first five years and halved in the next five years, this policy will be extended to 2020.
Ding Wenwu, the assistant director of electronic information product management division of MII, disclosed that in order to cooperate with the Ministry of Finance to establish the related financial tax policy, "The New 18th Document" will take some time to be promulgated, however, the promulgation of Principle also exists variables, as this has involved with the co-ordination work of finance, taxation, customs and other government departments, the pace has slowed down.
The difficulty of the new policy has made the industry in troubles, after India released its industrial policy, China has to improve and amend the relevant policy urgently, and the NPC deputies at this event urged the relevant departments to launch the new policy to support the development of industry as soon as possible..
