The Bank of Construction Tax Loans (BCB) is a special loan for business taxpayers, which is highly favoured by a wide range of taxpayers because of its high level and favourable interest rates. However, in recent years, a number of corporate taxpayers have pointed out that there are frequent instances of under- or non-availability of loan funds when applying for a build-up tax, the most prominent of which is the question of whether the build-up tax has been withheld

You've never paid a building tax

I. Reform of the internal banking system

The build-up tax loans have been kept at a low level and have nothing to do with the reform of the bank ' s internal management system. Since 1 September 2019, the List Management Scheme has been fully implemented, comprehensively regulating the banking list system and associated risk management. Previously, there had often been a large number of hidden guarantees in bank lending operations, such as the payment of money by shareholders, the purchase of a full house, etc., which had to some extent increased the bank ' s credit risk. As a result, the Bank has been more cautious in its review of loan applications, in the face of increased risk management, which tends to make it more difficult to review applications for loans with a certain risk, resulting in a shortage of tax credits。

II. Inadequate taxpayer qualifications

Another possible factor is the inability of an enterprise's taxpayers to meet the criteria for a bank application. The terms of application for a build-up tax loan are higher for taxpayers, if they must be taxed normally and have a certain tax record and the amount of the loan needs to be within a certain range. Only those enterprises that have a good tax reputation and are compliant with the purpose of the loan can be supported by a tax credit line. As a result, business taxpayers are likely to face a tight tax credit if the conditions for application are not met。

III. High demand for loans

One of the central factors in the persistent non-payment of construction loans is the excessive demand for them. In many regions, particularly in economically developed cities, there is a high demand for tax loans. Added to the severe financial risk controls of recent years, the extensive clean-up of financial institutions that blindly expand shadow banks, the inability of many SMEs to find a financing platform, the fact that banks, as traditional financing platforms, have become the preferred source of financing for a growing number of enterprises, leading to a sharp increase in demand for tax loans, limited bank resources and increased competition among clients。

Changes in credit policies

The last possible factor is a change in tax and lending policies. Banks are required to scrutinize the creditworthiness of loan applicants, as well as the business and industry risk assessment, in accordance with bank and regulatory policy requirements. A change in the bank ' s credit policy, an increase in the taxpayer ' s qualifications, or a limitation on the amount and scope of the tax credit may well lead to the creation of a tax credit gap。