The operating costs of small loan companies mainly include financing costs and related expenses incurred in conducting business. After being included in the scope of replacing business tax with VAT, small loan companies use bank loans, after-sales repurchases of financial assets, and Relevant costs incurred by financing such as third-party mortgage loans cannot be deducted from input tax, and labor expenses, welfare expenses, transportation expenses, and business entertainment expenses, which account for a large proportion of the expenses related to conducting business, cannot be deducted from input tax.

Expenses that can be deducted from input tax usually include fixed assets and materials, house rental fees, consulting service fees and accommodation fees, etc. Therefore, the input tax deduction ratio of small loan companies is very low.

Strengthen the management of input tax, including strengthening centralized procurement, supplier management, input invoice management and other methods to improve the input tax deduction ratio and invoice collection rate, so that "all the input tax should be offset", Further reducing the impact of replacing business tax with VAT on corporate tax burdens will also come at a cost.