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China announces export tax, tariff adjustments

By Li Zengxin (chinadaily.com.cn)
Updated: 2008-02-21 10:28

The Ministry of Finance has announced a few adjustments, raising export taxes on some fertilizers, cutting tariff and value-added tax (VAT) on imports of some agricultural equipment parts and exempting export taxes on cargos entering the special areas supervised by customs.

Export tax rates raised on some fertilizers

The ministry said in an announcement that with State Council approval, it will raise the provisional export tax on diammonium hydrogen phosphate and its mixtures, as well as on ammonium dihydrogen phosphate and its mixtures, to 35 percent between February 15 and September 30, 2008. Between October 1 and December 31, they will be subject to a 20 percent tax rate.

In addition, exports of some phosphor compound fertilizers will be taxed 35 percent from February 15 to September 30 and 20 percent from October 1 to December 31.

Analysts believe such a move is aimed at cubing exports of these fertilizers to guarantee domestic supply after their prices rocketed last year. According to China Customs, net export of ammonium dihydrogen phosphate reached 1.43 million tons in 2007, up 2.08 million tons from 2006. Pushed by export growth and production cost increases, prices of ammonium dihydrogen phosphate and its compound fertilizers grew 53.1 and 62.8 percent respectively last year.

Tariff and tax rebate on some agricultural equipment parts

The ministry said in a separate announcement that as of January 1, 2008, China has offered tariff and VAT rebates on key products imported by domestic businesses for research and development (R&D) and for production of new high powered agricultural equipment. The duties and VATs are collected but are then refunded to the companies. The refunds are recognized by the country as national investment and booked as national investment funds by the companies for future investment in innovative R&D.

The high powered agricultural equipment involved are: wheel tractors, axial-flow rice combine harvesters, potato combine harvesters, self-propelled silage harvesters, potato planters, large non-tilting wheat seeders, soil covering rice direct seeders and cotton pickers.

The announcement also said that starting March 1, 2008, fledgling companies will no longer be exempt from tariffs on a group of agricultural vehicles and equipment. Domestic and overseas projects registered after March 1 will no longer enjoy tariff exemption on caterpillar tractors and the high powered agricultural equipment listed above.

Enterprises established before March 1, 2008 are subject to the current tax exemption when importing caterpillar tractors and high powered agricultural equipment through September 1, 2008.

Export tax exemption on goods in special areas supervised by customs

The Ministry of Finance said in another notice that construction materials for block and workshop buildings in the special areas supervised by customs are exempt from export taxes. These materials may not leave the areas for export. If there are leftover materials when construction is complete, such unused materials must be moved out of the construction zones and back to the country's domestic territory.


(For more biz stories, please visit Industry Updates)



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