Recent statements by the United States Trade Representative Robert Zoellick appear to hint that the US government is on the brink of launching an action against China at the WTO over the latter country's discriminatory tax regime.
US industry has long complained that it cannot compete inside China due to the favorable tax treatment given to domestic producers, particularly in the semiconductor sector. The Bush administration has for some time been urging the Chinese to level the tax playing field, but to no avail.
However, Zoellick signalled to reporters on Monday that the US government has finally lost patience with China on trade issues. "In terms of enforcement, we believe we can walk and chew gum at the same time. Stay tuned later this week, maybe you'll get some evidence of that," he stated. His comments come after telling the Senate Finance Committee last week that the US could become the first nation to seek redress against China at the WTO if the Chinese failed to make changes to VAT administration.
In his annual report, submitted to Congress in December last year, Zoellick noted that China’s “questionable use of certain tax policies” favor domestic production at the expense of imports from abroad or foreign businesses operating in China.
Chiefly, the report criticized the Chinese government’s use of the VAT (Value Added Tax) system.
“In particular, China provides for rebate of a substantial portion of the 17 percent VAT paid by domestic manufacturers on their locally produced ICs (integrated circuits)," Zoellick observed. “China, meanwhile, charges the full 17 percent VAT on imported ICs, unless they were designed in China,” he complained.
The report also pointed out additional concerns regarding China’s consumption tax system as it is applied to domestic and foreign producers, which has the effect of substantially increasing consumption tax for imports compared to domestically produced goods.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment