Adjusting The Industrial Structure, Wenzhou Leather Industry Is Struggling To Find A Way To Remould Itself.

"In the first half of this year, the sales volume of our company decreased by 33 million 800 thousand yuan, down by nearly 50%."

Pingyang County export large household Zhejiang overseas Chinese leather Co., Ltd. recently complained.

The head of Zhejiang Leather Manufacturing Co., Ltd., another large exporter of leather products, also said that the company will reduce its profits by at least 600 to 20 million yuan this year.

As the saying goes, taxation is a barometer of the economy.

The tax data released by Wenzhou's IRS recently released the first half of this year also confirms the hidden worries of the leather industry.

According to statistics, the tax revenue of Wenzhou's national tax system was 8 billion 167 million yuan in the first half of the year, an increase of 24.15% over the previous year, and an increase of 1 billion 589 million yuan.

The sixteen industries, the footwear industry, clothing, electrical appliances, glasses, printing, plastic weaving, valves, pens, locks, synthetic leather, pig leather, lighters, automobile and motorcycle fittings, chemical industry, communication equipment and beverage manufacturing, which can best reflect the characteristics of Wenzhou's economy, have achieved sales revenue of 71 billion 459 million yuan, an increase of 17.29% in the same proportion, and a 3 billion 5 million yuan in tax revenue, an increase of 14.22% over the same period last year.

Among them, there are three industries whose income is over ten million yuan, and the increase is higher than the average growth rate of the city. There are 77 million 780 thousand industries, such as valves, glasses and locks, which increase by 77 million 780 thousand yuan, while two industries with negative growth are synthetic leather, pig leather and two industries.

Among them, the tax revenue of synthetic leather industry was 155 million 790 thousand yuan, down 1.9% from the same period last year, and reduced by 3 million 20 thousand yuan. The pig leather industry's tax revenue in the first half of this year was 90 million 190 thousand yuan, down 0.88% from last year, and it was reduced by 800 thousand yuan.

There are many reasons why development bottlenecks are encountered. Leather industry is a traditional industry in Wenzhou. It is also one of the pillar industries in Wenzhou. There are more than 4000 enterprises in the city and about 400000 employees.

"To synthesize leather and go to Wenzhou" has become the mantra of domestic and foreign merchants.

However, with the rapid development of leather industry, the difficulties and bottlenecks encountered are constantly being encountered.

In recent years, frequent international trade frictions and adjustment of national industrial policies and other factors are increasingly revealing and amplifying many hidden worries of the leather industry.

Take Pingyang County, the most developed leather industry as an example. At the peak, the industry's tax revenue once accounted for 50% of the county's tax revenue.

However, behind the glory is the heavy environmental cost. While the leather industry is developing faster and produces economic benefits, it has wasted resources and sacrificed the environment due to its backward equipment, technology and technology.

In order to increase environmental control, the county last year, with the determination and boldness of grandeur, carried out a comprehensive shutdown and rectification of the leather industry, and reorganized the new enterprises. The number of enterprises was reduced from 162 to 39, and the rotational drum (main production equipment) was reduced from more than 3000 to 500, and the tannery gross output of the county was reduced by nearly 5 times.

In July 1st this year, the state made a major adjustment to the export rebate rate of some commodities. The export rebate rate of leather products was abolished, and the export tax rebate rate of leather products dropped from 13% to 5%. This is no doubt a heavy blow to the tannery industry in the predicament.

Qiao Xin company official told reporters that the recent domestic pork prices, and now the state has introduced a tax rebate policy, the original export of finished pig leather sold for 0.54 dollars per foot, now it will rise to 0.66 dollars to maintain the original profit.

If prices rise, some customers may turn to Taiwan or India for purchase, and most tanneries will have a sharp drop in sales in the short term.

If combined with the recent appreciation of the renminbi, the rise in the price of raw materials and the rise in labor costs, and the pressure on prices among peers, the labour pains of the leather industry will be inevitable.

To protect the tax source and boost the industry's re emergence, aiming at the development dilemma faced by the leather industry, Wenzhou's national tax department has taken the initiative to protect the tax source, solve problems for enterprises, and help the leather industry to rise again.

National tax cadres went deep into enterprise investigation and research, launched monthly activities of tax service, held a symposium on leather enterprises, listened to the voice of enterprises, visited more than 50 key enterprises in leather industry, and settled the tax payment doubtful points and difficult problems on the spot, and recorded the more than 10 suggestions of enterprises.

And through tax business service team, policy bulletin and other forms of service to the enterprise to the latest tax policy.

In the industry tax management, according to the industry situation, the leather industry management manual has been worked out. The main contents include the basic process of industry management, tax propaganda and guidance, household registration management, on-site audit and establishment of an early warning system. Through collecting the basic information of the industry, the main production equipment, the annual production capacity early warning line, the cost structure analysis, and the annual inventory data of raw materials and auxiliary materials, we have set up an early warning index system of cost ratio, warning rate, tax rate early warning rate, capacity early warning rate, power consumption, sewage and other early warning indicators, and further strengthened the management of the industry.

In addition, Wenzhou city's Internal Revenue Bureau has launched three distinctive industries, the top 10 tax revenue list, and the sales revenue, tax rate, tax revenue and elasticity coefficient of the economy are comparatively analyzed. The four team leaders and relevant economic functional departments, trade associations and related enterprises are regularly assigned to enable them to understand the development of leather industry in a timely manner.

Through a series of research, the city tax department also recommended measures to the Wenzhou municipal government to maintain the stable development of leather industry in the city.

The export tax rebate rate has been lowered, and the national tax department has put forward suggestions in time to control operational risks, reduce costs, optimize product mix, develop new products, enhance international bargaining power, pform trade patterns, and expand domestic markets.

Wenzhou leather enterprises are actively taking measures to deal with the plight of the industry.

In response to the adjustment of the export tax rebate policy, enterprises have adjusted their product mix, increased the production and export of high value-added, high technology and low pollution products, and extended the industrial processing chain to pform the incoming processing trade into a deep processing conforming to the tax-free policy.

In view of the rising price of raw materials, enterprises should further strengthen cost management, reduce product costs and increase profit margins; in addition, they should strengthen price negotiation through negotiation, raise bargaining power, raise the unit price of contracts, and adjust and pfer risks through the market.

Aiming at the fluctuation of exchange rate, some large enterprises such as Zhejiang Far East leather Co., Ltd. have adopted the international settlement business such as export bills, business discount and long term settlement, to avoid exchange rate risk.