Cen­tral govt set to take over tax re­bate process

China Daily (Canada) - - FRONT PAGE -

re­bates to the cen­tral gov­ern­ment, which then added the other 92.5 per­cent and re­im­bursed com­pa­nies.

Zhao Zhongxiu, a trade pro­fes­sor at the Bei­jing-based Uni­ver­sity of In­ter­na­tional Busi­ness and Eco­nomics, said that some lo­cal gov­ern­ments had been re­luc­tant to de­velop ex­port-ori­ented com­pa­nies due to the sub­se­quent bur­den of re­bates.

“By as­sum­ing the full bur­den of re­bates, the cen­tral gov­ern­ment will sweep clean the ob­sta­cles that dis­cour­age lo­cal gov­ern­ments from de­vel­op­ing ex­ports,” said Zhao. “There is hope that this pol­icy will re­duce the bur­den of prov­inces with ex­port ad­van­tages and boost over­all ex­ports.”

The lat­est mea­sure comes as Bei­jing seeks to put trade growth on a firmer foot­ing in 2015.

Amid weak global de­mand and ris­ing do­mes­tic costs, China’s to­tal for­eign trade growth missed its tar­get of 7.5 per­cent in 2014. Ac­tu­ally growth was less than half that level, at just 3.4 per­cent.

Ex­ports rose 4.9 per­cent to 14.39 tril­lion yuan ($2.32 tril­lion), while im­ports fell 0.6 per­cent to 12.04 tril­lion yuan.

Weak­ness in ex­ports has per­sisted this year. In Jan­uary, ex­ports slid 3.2 per­cent year-on-year to 1.23 tril­lion yuan, ac­cord­ing to Gen­eral Ad­min­is­tra­tion of Cus­toms data re­leased in Fe­bru­ary.

Zhang Beilei, gen­eral manager of Wen­zhou Gao­tian Shoe Co, said: “The new ex­port tax re­bate pol­icy will ease cer­tain bur­dens on com­pa­nies by ob­tain­ing re­bates faster, although get­ting ex­port tax re­funds hasn’t been much of a prob­lem thus far.”

Wen­zhou Gao­tian had to lay off 10 per­cent of its em­ploy­ees to cut costs af­ter ex­port or­ders sank by about 20 per­cent in 2014.

“Gov­ern­ment sup­port in­volv­ing tax poli­cies and re­cent in­ter­est rate cuts will bring hope to ex­port com­pa­nies that have been ex­pect­ing a bounce­back in the trade en­vi­ron­ment. It’s been mis­er­able for the past two years,” Zhang said.

Other smaller ad­just­ments to the ex­port tax re­bate sys­tem have been made re­cently, in­clud­ing fur­ther del­e­ga­tion of ap­proval author­ity, a sim­pli­fied ap­pli­ca­tion process and faster re­bates. Con­tact the writ­ers at muchen@chi­nadaily.com.cn and yu­ran@chi­nadaily.com.cn Zhong Nan in Bei­jing con­trib­uted to this story.

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