China to Raise Tax Rebates on Selected Export Goods
Oct. 22 – China’s Ministry of Finance said tax rebates on selected export products will be raised beginning November 1; to ease pressure on businesses affected by slowing export demand.
This is the second time in three months that China has increased tax rebates for the export industry. Last August 1, tax rebates were increased by 2 percentage points to 13 percent.
The new tax rebate rates will range from between 9 percent and 13 percent and cover 3,486 types of products, or an estimated one-quarter of all exports listed by customs authorities.
Tax rebates on shipments of textiles and garments and toys will be increased to 14 percent while furniture exports can qualify for a 13 percent tax rebate.
AIDS medications, steel wire used for appliances, and some types of plastics and machinery will be increased accordingly by 9 percent, 11 percent, and 13 percent.
China’s State Council has said that it will be implementing measures that should push growth and buffer against the unstable international markets, including slashing administrative fees in property transactions.
“The tax-rebate rises won’t make a big impact on textile companies, but it reflected the government’s determination to help the export sector,” Zhang Bing, a Sinolink Securities Co analyst told Shanghai Daily.
“Giving some credit support and direct subsidies to those companies as the next step will likely achieve better results.”
For the first nine months of the year, garments exports amounted to US$87.1 billion, a decrease 21.2 percentage points from last year’s figures. During the same period, the country’s GDP expanded by 9 percent, the slowest in five years.
Exporters have been struggling to cope with am appreciating yuan and rising production costs. According to Customs figures, 3,631 toy exporters, or 52.7 percent of the industry’s total, were closed in the first seven months.
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