The Impact Of Corporate Income Tax Relief On Corporate Profitability

Integrated circuit industry,as the "food of modern industry" in China,is the pillar industry to promote the country’s technological revolution.Integrated circuit products are also widely used in software,information technology,military industry and other fields,which are closely related to the information security of the country.However,China developed the integrated circuit industry relatively late,and the development of the core technology is slow.The reason is that,in addition to the problems encountered in our own development,the external environment is also very important.As the western countries,led by the United States in recent years gradually realize the importance of semiconductor related products in the development of modern industry,and China’s development potential in the semiconductor industry,they began to China through various ways to limit the rise and development of the industry,from the "zte event" to "Huawei event" to recently complete the United States of the2022 chip and science act legislative process,confirm the view.Under this background,the rapid development for the integrated circuit manufacturing enterprises,break the trade barriers and trade monopoly,reducing the gap with foreign in the related field,the government formulated a series of enterprise income tax relief measures to help the integrated circuit industry rapid development,the implementation of these policies is to a certain extent,promote the development of the integrated circuit manufacturing enterprises,the scale expanded year by year,However,due to the low added value and low technology content of the products produced by Chinese enterprises,the profitability of China’s IC manufacturing enterprises is still very low.To a certain extent,the level of profitability restricts the improvement of their research and development ability,and hinders the development of the whole industry.At present,in order to further learn from experience and promote industrial progress,this thesis mainly studies the change and difference of the profitability of IC production enterprises after enjoying the enterprise income tax reduction and exemption,and on this basis,puts forward some opinions for improving the enterprise income tax reduction and exemption policy enjoyed by IC production enterprises.First of all,this thesis sorts out the tax reduction and exemption policies implemented in the past and the present,and understands that the main purpose of my country’s corporate income tax reduction for integrated circuit manufacturing enterprises is to reduce the tax expenditure of enterprises through tax reduction and exemption,increase the retained earnings of enterprises,and promote enterprises.Use this part of the funds to improve your own research and development level,enhance the competitiveness of the company’s products,increase the output value of the industry,and then promote the overall profitability of the industry through these reverses.Although the policy point of view is very reasonable,but tax reduction and exemption There are still some problems in the process of policy implementation,such as the vagueness of the applicable objects of the policy and the imperfect legal system,which may make the policy effect less than expected.In the next place,in order to verify whether there are problems in the implementation of China’s enterprise income tax reduction policy,this thesis selects listed enterprises producing integrated circuits as the research object,and collects relevant financial data of these companies from 2014 to 2021 to conduct a DIFFERENTIAL difference study.This article selects the cost profit margins as the enterprise’s profit ability index,asset-liability ratio,return on equity,assets as control variables,such as establishing the enterprise income tax reduction and cost analysis,the regression model between profit margins finally came to the conclusion that a reduction of or exemption from income tax can contribute to the profitability of integrated circuit manufacturing enterprises.Finally,In the last chapter of this thesis,the conclusions drawn from the empirical analysis in the previous article are expounded,and a series of suggestions are put forward according to the empirical results.Firstly,the results of the full sample analysis show that the reduction and exemption of corporate income tax has effectively promoted the improvement of the profitability of integrated circuit manufacturers.The regression analysis by scale confirms the above conclusion again,and from the perspective of empirical analysis by enterprise scale,we see that the smaller the enterprise scale,the more obvious the policy effect of the enterprise.Secondly,according to the above conclusions,suggestions are made from several aspects.In terms of policy implementation,we should pay attention to the long-term nature of policy implementation and the continuous optimization of policies;in terms of personnel training,we must pay attention to the cultivation of relevant talents;in terms of taxation In terms of policy guidance,the government should guide enterprises to make good use of the tax reduction and exemption;Enterprises of different sizes have introduced different tax reduction policies.