Logistics industry: a pilot expansion of VAT reform on the impact of logistics

In terms of short-term profit impact, the railway is positive, the road is negative but there is a large government subsidy, which can have a small negative impact on logistics. Involve the addition of 10 provinces and cities we covered by listed companies respectively ninghu high-speed, shanghai-hangzhou-ningbo high-speed (H), zhejiang, anhui anhui high-speed, high-speed chutian, c&d co, guangshen railway, yuexiu (H) and the highway transportation, we expect profit in negative influence to highway industry is about 1% ~ 1%, mainly due to tax rates rise from 3% of the sales tax to 6% of the value-added tax, but the cost of deductible items caused by less. Among them, zhejiang huhang yongyong profit the least negative impact, about 1%; The negative impact of the high and high speed of the state of chu and wantong was the biggest, respectively 7.0% and 6.5% respectively. For the guangzhou-shenzhen railway, we expect to have a positive impact of about 4%, mainly due to the more deductible items in the railway industry. Please refer to chart 1 for details. However, in the case of the Hong Kong and Shanghai airports, the government has a larger opportunity to subsidize the tax increase in the pilot process, so the actual impact will be less than the theoretical value we calculated. At the same time, we have calculated the profit impact of the listed logistics companies in the trial, with an average of 2% or so of the negative impact. Please see the chart 2 of the main body of our report.
In the medium term, it will reduce the cost of social logistics and improve the profitability of the logistics industry, but it will be a bittersweet process for logistics enterprises to profit from the situation in Shanghai. The expansion of the pilot scope will increase the scope of deductible input tax, which will help reduce the burden of logistics enterprises and the overall logistics cost of the society. But in the current economic weakness, overcapacity, industrial unrest and tax management, we believe that the profit level of the logistics industry will be a process of first suffering and sweet.
Initial profit negative impact, taxes cannot be transferred effectively. If the logistics are divided into three parts, warehousing, freight forwarding and transportation, the tax rate of the former two is only converted from 5% business tax to 6% value-added tax, which has little practical effect. The shift from a 3 per cent business tax to an 11 per cent value-added tax is evident in the transport sector. We take the standard container road transportation as an example, charging about 650 yuan / 100 kilometers, and the tax rate of the downstream customers is reduced by 26 yuan. And transportation company is due to lack of input tax deductible tax increase 12 yuan, combine the chain on the overall tax fell 14 yuan, so is good for logistics cost reduction (table 4). However, due to the similar perfect competition market in the transportation industry, in the current situation of insufficient demand, we believe that the cost of the tax increase before the recovery will be difficult to pass along.