New VAT systems did not achieve the goals for logistic industry in Shanghai

Logistic industry belongs to service sector and the tax rate can be measured by the value of invoices issued by suppliers of raw materials or the value of the sales invoices issued by the service companies to their customers. In the past, logistic companies agree to a sales tax of 3 per cent but a new system of a value added tax (VAT) levied at a rate of 11 per cent has been carried out at the trial stage. Last October the State Council decided to replace the old tax regime applied to service sectors with a VAT system to reduce tax collections by 400 billion yuan. The change in the business-tax policies was in line with Beijing's blueprint announced in 2009 to rejuvenate key industries, including logistics. Officials should have organized training courses before the pilot scheme to help accountants at Shanghai logistics companies get an understanding of the new rules. A lower tax payment was believed by the central government to be the most efficient incentive that could bolster the country's small and medium-sized businesses. In the end, SMEs can not reduce their burdens as well as logistic companies. As service firms, SMEs and logistic companies need to cut down cost and make profit. SMEs and logistic companies need government support and bank support to tackle real problems in tax and financing. IBUonline is a B2B e-business platform, where SMEs can find international buyers and logistics companies have agreed to provide good quality services to help SMEs and international buyers to complete foreign trade. SMEs and logistic companies can benefit from some e-business platform; no matter it is a B2C or B2B platform.