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Government plans export tax rebate cuts

By Jiang Wei (China Daily)
Updated: 2006-06-08 08:57

The government is considering cutting export tax rebates in a bid to protect natural resources and help upgrade domestic industries.

The reduction is aimed at controlling the export of products that consume a lot of resources and energy, and lead to high levels of pollution.

The suggestion came from an official with the State Administration of Taxation, who was quoted by the Shanghai Morning Post.

He declined to disclose details, but the average cut is estimated to be about 2 percentage points.

The industries covered are expected to include textiles, steel and light industrial products.

The State Administration of Taxation, the Finance Ministry, the National Development and Reform Commission and the Ministry of Commerce are involved in on-going discussions over this issue.

After the adjustment, export tax rebate rates for other products, such as high-tech goods, are expected to increase.

Although details have not yet been clarified, some insiders say the process could start as early as this month.

Government agencies have considered reducing rebates for some time, said Li Yushi, a trade researcher with Chinese Academy of International Trade and Economic Co-operation, a think-tank under the Ministry of Commerce.

"Lower tax rebates would spur domestic exporters to increase the value of their products and upgrading technologies to remain competitive," he said.