Let's talk about the impact of the "Announcement on the Value-Added Tax Policy for Interest Income from Government Bonds and Other Bonds."

Starting from August 8 this year, value-added tax will be reinstated on the interest income from newly issued government bonds, local government bonds, and financial bonds, at a tax rate of 6%.

This has a significant impact on the capital market, so let me clarify the situation for everyone.

The tax exemption policy for government bond interest was implemented in 1992, a time when I wasn't even born, which makes this policy quite advanced and in line with international standards. Up to now, the majority of government bond interest globally is still borne by national finances.

So why break the 33-year tradition this year and reinstate value-added tax on government bond interest? The more official interpretation is that the tax incentive policy has completed its historical mission, and financial considerations aim to prevent excessive liquidity.

I looked at the latest scale of government and financial bonds, with an outstanding balance of 133 trillion yuan. If taxed at 6%, the subsequent income from interest value-added tax is roughly around 100 billion yuan.

The actual purpose is really twofold: one is to suppress the overheating of the bond market, as buying government bonds has been too crazy in the past two years, with many funds not investing but lying flat to earn interest, which is not conducive to the effective use of funds; the other is that this amount is not trivial and can alleviate financial pressure.

For the capital market, it is a short-term benefit, as it can force some funds out of the bond market, which may enter the stock market. However, fundamentally, it is seen as a negative factor because increasing bond market costs is one issue, while the rising expectations of taxation in related fields is a more troubling problem, as people can easily extend this analogy to other financial sectors. $China Ping An (SH601318)$