The head of a leading Chinese aquaculture player and feed supplier is blaming China’s tax system for the lack of corporate development and investment in the country’s aquaculture sector.
Tongwei head Liu Han Yuan told the ongoing National People’s Congress in Beijing that the current tax rate is putting a burden on aquaculture firms, and is unfair. In addition to running the agricultural and solar power conglomerate, Liu also serves as a delegate to the National People’s Congress, which meets for two weeks in March each year.
According to Liu, the current 12.5 percent tax on aquaculture firms is unfair, as livestock firms don’t face such a tax.
“Hence aquaculture enterprises are far more likely to register as cooperatives or sole traders rather than corporations,” Liu said.
The tax inequality is preventing the aquaculture sector from achieving “scale and standardized operations,” Liu said in a press release on his remarks at congress, which was shared by Tongwei.
Liu pointed to the concentration of ownership in various sectors compared to the concentration in aquaculture as evidence of the inequity. The top ten companies in aquaculture production account for only two percent of China’s national aquaculture output. By contrast, the ten largest pig breeding firms have a market share of 12 percent, while the top ten poultry raising companies have a market share of 40 percent.
Moreso, seafood products face a 9 percent value added tax at the market distribution stage, noted Liu, while meat products are exempt. The result of the taxes is that much of China’s seafood is sold live at retail outlets and markets – though an increasing share is also being processed – whereas many of the country’s pork and poultry firms avoid the tax as they slaughter animals and birds which they have farmed themselves.
This isn’t the first time that Liu has called for tax breaks for aquaculture. At the 2019 National People’s Congress, Liu had similar arguments about aquaculture facing higher taxes and called for reform of the tax structure.
Despite the obstacles, Tongwei Group has touted greater productivity from its combined aquaculture-solar parks, with solar panel installations capable of reducing heat by one to three degrees, according to the group – which farms bass, carp, croaker and tilapia. Tongwei has also sought to incorporate leisure fishing and tourism in its facilities.
Photo courtesy of chinahbzyg/Shutterstock
