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China Announces Further Tax Boost For Exporters

by Mary Swire, Tax-News.com, Hong Kong

29 December 2008


China is set to increase export tax rebates for hundreds of machinery products from January 1, 2009, it has been announced.

The decision was made by the country's Ministry of Finance (MoF) and the State Administration of Taxation, and was announced by the government on December 29.

According to the government, the move is being made to try and give a helping hand to those exporters suffering significantly as a result of the current economic downturn.

Under the new regime, export rebates for around 553 types of high-tech and high-value mechanical and electronic products will be increased from 13 to 17%. Specifically, the rate levied on motorcycles and sewing machines being exported will be increased from 11 and 13% to 14%.

Once in place, it will mark the fourth amendment to export taxes for Chinese manufacturers over the course of 2008, the first of which took place in August, with two further adjustments taking place in November and December.

The rebates will allow Chinese companies to reclaim a proportion of the money they've paid in value-added tax throughout the production process of the goods in question.

Chinese exporters have been particularly hard hit by the recent slowdown in economic activity, with overseas sales declining by 2.2% towards the end of this year; the first decline of such magnitude for over seven years.

In a statement regarding the amendment on its website, the MoF explained:

"The move will help ease the sufferings of Chinese exporters and boost the country's confidence in fighting the financial crisis."


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