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Export Tax Rebate Adjustment Partially Offset Cost Pressures

2008/8/26 15:44:00 22

Apparel Textile Enterprises Export Tax Rebate Costs Rise

"The increase of export tax rebate rate is undoubtedly good news for textile enterprises, and more importantly, it releases the signal of the state's policy support to the textile industry."

In late August, Zhang Xingzhong, vice president of marketing of Binzhou Huanyu Textile Technology Co., Ltd.

The Ministry of Finance and the State Administration of Taxation issued a notice in July 31st. From August 1st, the export rebate rate of some textiles and clothing increased from 11% to 13%.

The range of adjustment includes silk, woolen textiles, hemp textiles, chemical filament yarn, floc, felt, non-woven fabrics, knitted garments, woven garments and accessories, knitted fabrics and accessories, and some other textile fabrics.

Part of the "two high one capital" products still maintain the level of tax rebate last year.

The Limited by Share Ltd issued a notice on August 1st that the export tax rebate rate adjustment will have a greater impact on the company's performance in the second half of the year and in the future.

According to the company's financial department estimates, six months can increase the pre tax profit of about 15 million yuan.

People in the Department of foreign trade and economic cooperation said that the focus of the adjustment is on the downstream knitting and garment industry, which contains all the tax numbers associated with clothing related products. Basically, all garment exporters can enjoy the benefits of this policy adjustment.

The export rebates of some upstream and middle products such as cotton yarn and chemical fiber have also been raised on the same scale.

The adjustment of the tax refund policy for downstream products will help increase exports, ease the contradiction between insufficient demand in the upstream and middle reaches, and indirectly support the development of the upstream and downstream industries.

But he also said that the export tax rebate rate increased by 2 percentage points, but partly offset the pressure on the appreciation of the renminbi and rising costs in the industry, it is difficult to produce substantive impact.

From the enterprise level, it is only a little better for some small and medium-sized enterprises with difficulty in operation.

This view has also been recognized by enterprises.

Zhang Xingzhong thinks that although the export tax rebate rate is raised by 1 percentage points, it is equivalent to 1% of the total export volume of enterprises, but the appreciation of RMB and the rising cost of production have already eroded this part of profits.

Zhang Xingzhong has calculated an account. Since the exchange reform in 2005, the appreciation of RMB has reached 20% in three years. The export rebate rate of cotton yarn and cotton cloth has been gradually reduced to 11% from the original 17%, which deducts 10% of the export price increase. Without considering the domestic factors, the cost of doing foreign trade is increased by 16% than that of three years ago.

This year, domestic factors such as coal, electricity and oil pportation lead to an increase of more than 20% of production cost. The increase of export tax rebate rate of 2% is merely a drop in the bucket and can not solve the fundamental problem.