A 1 Percentage Point Increase In Export Tax Rebates For Textile Products

The Ministry of Finance and the State Administration of Taxation issued the notice on raising the export tax rebate rate for some commodities. It is clear that from November 1, 2008, the export tax rebate rate of some labor-intensive and high technology and high added value commodities should be appropriately raised. Among them, the export tax rebate rate of some textiles, clothing and toys will be raised to 14%.

This is the second time the government has raised the export tax rebate rate for textiles and clothing this year. In August 1st this year, the export rebate rate of some textiles and garments increased from 11% to 13%. It is worth noting that the export tax rebates for toys have also been raised.

"Raising the export tax rebate rate again is expected in the industry, but the raising rate is so small that it is surprising that the industry is expected to raise it to 15% or even 17%." Experts say.

Galaxy Securities analyst Mari said the increase of 1 percentage points was little good for the industry. "The biggest problem facing the textile industry is the decline in demand from the United States. Although exports to Europe are good this year, the situation is not optimistic next year. Maybe next year, the export of textile industry is negative growth."

Roughly estimated, the export tax rebate rate increased by one percentage point, the textile industry tax rebate can reach 5 billion yuan, while the textile industry can also increase profits of about 4 billion yuan. However, Wang Qian said, "rather than increasing profits, it is better to reduce losses, which is only symbolic for the textile industry." Because the situation facing the textile industry is quite different from that in the first half of the year, although it is not profitable in the first half of the year, after all, it has orders to connect, but now it is facing difficulties in receiving orders. "

"This may be just a drop in the bucket. Many enterprises in the textile industry are on the verge of bankruptcy. What they need is big stride. If such a small walk is slow, it may not be long before they die." Wang Qian pointed out.

From January to August this year, the profits of textile enterprises above Designated Size reached 73 billion 960 million yuan, an increase of 3.19% over the previous year, representing a decrease of 5.17 percentage points compared with the previous May, which was significantly reduced by 33.79 percentage points from 1 to November last year, the lowest growth rate since 2001. Among them, 30% of the total textile enterprises accounted for 98.23% of the total industry, while the other 70% accounted for only 1.77% of the total, basically in zero profits or even deficit.

There are two main factors leading to a sharp decline in corporate profits: first, the global economic growth slowed down significantly under the impact of the subprime mortgage crisis; the boom in the textile industry is not as good as before, and the output rate slows down; two, the advent of the high cost era, and in the case that the cost pressure is difficult to move downstream, corporate profits are constantly squeezed.