On October 8, the State Council executive meeting decided to improve the export tax rebate policy, with the purpose of reducing the burden on enterprises and maintaining stable growth of foreign trade. The meeting decided that starting from November 1, the current export tax rebate rate for goods will be raised from 15% and part of 13% to 16%; 9% will be raised to 10%, part of which will be raised to 13%; 5% will be raised to 6% %, partially raised to 10%; the export rebate rate for high energy consumption, high pollution, resource products and products facing overcapacity reduction tasks will remain unchanged, and the tax system will be further simplified.
Compared with before, the intensity of foreign trade tax rebates has been significantly increased after the export tax rebate policy was improved. Industry insiders interviewed believe that the export tax rebate policy is in line with international practice and World Trade Organization rules, and will help China respond to external changes and stabilize foreign trade while accelerating industrial structural adjustment, promoting supply-side reform, and enhancing China’s export competitiveness.
Tax rebates bring benefits to enterprises
The October State Council executive meeting was not the first time this year that an increase in the export tax rebate rate was proposed. In September, the official website of the Ministry of Finance issued a notice on increasing the export tax rebate rate for electromechanical and cultural products, increasing the export tax rebate rate for multi-component integrated circuits, non-electromagnetic interference filters, books, newspapers and other products to 16%; increasing the export tax rebate rate for bamboo carvings, wooden fans, etc. The export tax rebate rate for products will be increased to 13%; the export tax rebate rate for basalt fiber and its products, safety pins and other products will be increased to 9%.
It is worth noting that the two consecutive increases in the export tax rebate rate were carried out against the background of the escalating trade friction between China and the United States. Since July, the United States has imposed punitive high tariffs on exports worth US$34 billion, US$16 billion, and US$200 billion from China, putting greater pressure on corporate exports.
Zhao Ping, director of the International Trade Research Department of the China Council for the Promotion of International Trade, said in an interview with a reporter from the International Business Daily that the high tariffs imposed by the United States on Chinese goods have become a very uncertain factor affecting the growth of foreign trade, and it is more urgent to stabilize the growth of foreign trade. The two consecutive increases in the current export tax rebate rate for goods will bring the tax burden of Chinese companies in international market competition closer to that of other countries, thereby achieving more equal competition.
Dong Yan, director of the International Trade Research Office of the Institute of World Economics and Politics, Chinese Academy of Social Sciences, said that the purpose of adjusting the export tax rebate rate is to increase support for enterprises with real money, which can reduce the burden on enterprises to a certain extent and hedge against external factors. Some adverse impacts also boost market confidence and help companies respond to changes in the external environment more smoothly. In particular, mechanical and electrical products account for 58.2% of China’s total exports. Increasing the export tax rebate rate for mechanical and electrical products is of great significance to stabilizing foreign trade.
As pointed out at this State Council executive meeting, the implementation of export tax rebates is in line with World Trade Organization rules. China has implemented an export tax rebate policy since 1985. With the implementation of the new policy, the intensity of export tax rebates will be further increased. Data released by the Ministry of Finance show that China’s export tax rebate amount in 2017 was 1,387.037 billion yuan, a year-on-year increase of 14.1%, a record high, accounting for 9.6% of tax revenue.
Accelerate supply-side structural reform
“I hope the export tax rebate can be faster.” The person in charge of an export company interviewed by a reporter from International Business Daily said that export tax rebates are generally collected first and then later, which will occupy part of the company’s funds, and this part of the funds can be used To purchase raw materials, research and development, production, etc., if the tax refund time is too long, it will bring financial pressure to the enterprise. “I hope that the export tax refund can be issued early, or simply exempted from tax and refund.”
In fact, the government has taken into account this urgent need of enterprises. In the past two months, the executive meetings of the State Council have mentioned improving the export tax rebate policy three times on August 30, September 18, and October 8, and accelerating the progress of export tax rebates. This State Council executive meeting clearly stated that in order to further speed up the progress of tax refunds, the procedures for export enterprises with high credit ratings and good tax records will be simplified, the tax refund time will be shortened, paperless tax refund declarations will be fully implemented, and the efficiency of tax refund review will be improved. Optimize tax refund services, help enterprises collect documents in a timely manner to declare tax refunds, and achieve full online coverage of electronic refunds as soon as possible. Comprehensive foreign trade service enterprises are encouraged to provide tax refund services for small and medium-sized enterprises. Before the end of this year, the average time for processing tax refunds will be shortened from the current 13 working days to 10 working days. At the same time, the tax system will be further simplified, with the tax refund rate reduced from the original seven levels to five.
Analysts believe that judging from the export tax rebate policy introduced in September and October, the tendency to adjust the structure is obvious, that is, vigorous tax reductions will be carried out for mechanical and electrical, cultural and other products that are in line with the direction of optimizing the export structure. “Three high” products and products facing the task of reducing overcapacity cannot enjoy the convenience of the new policy. At the same time, the synergy between burden reduction and reform is also a highlight, which is expected to have positive significance for corporate exports and supply-side structural reforms. While the policy is becoming more relaxed, the meeting also made it clear that we will resolutely crack down on fraudulent export tax rebates.
Zhao Zhongxiu, dean of the School of International Trade at the University of International Business and Economics, said in an interview with a reporter from the International Business Daily that the export tax rebate policy can reduce or even eliminate taxes in the domestic link. This plays an important role in optimizing the industrial structure and we must try our best. Achieve zero tax export. Not only that, corresponding measures should also be taken to improve: first, make the export tax rebate rate more mature and stable to avoid discomfort caused by sudden highs and lows to business operations; second,…The tax amount needs to be further increased; third, the time from approval to tax refund is further shortened; fourth, relevant tax refund policies must be accelerated and improved for goods exported through new business formats. (Title: China’s exports are advancing by “retreating”)
