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Deducing The Direction Of Import And Export Tax Rebate Policy

2008/10/13 16:03:00 41831

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　中國出口退稅政策與國際貿易失衡間的關系，將成為決策層未來調整出口退稅政策重要的考量因素。近幾日，有關“出口退稅率將大幅降低”的消息在坊間廣為流傳，令中國出口企業在6月的夏日感到絲絲寒意。其中，關于輕工和紡織行業將調低兩個百分點的傳聞，更讓相關企業及從業者備感壓力。

In June 8th, officials of relevant departments of the State Administration of Taxation confirmed to the financial reporter that there was no major adjustment plan for the export tax rebate policy recently.

Reporters also learned from the Ministry of finance that as an important part of the new round of tax reform, the research on the adjustment and improvement of the export tax rebate policy has been going on.

In this sense, the foregoing "hearsay" is not groundless.

China's export tax rebate policy began in 1985, when the policy target was to encourage exports to earn foreign exchange, improve the competitiveness of export commodities and promote the development of national economy.

Since then, the export tax rebate policy and the tax rebate rate have been adjusted frequently due to changes in the government's revenue and expenditure, the surplus and deficiency of domestic commodities and the terms of trade.

With the accelerated pace of economic globalization, China's economy has more and more influence on world economic growth, showing a "double surplus" pattern of current account and capital account, which leads to the pressure of appreciation of RMB exchange rate, making the adjustment of export tax rebate policy more complicated.

There are various indications that the relationship between China's export tax rebate policy and international trade imbalance will become an important consideration factor for policymakers to adjust the export tax rebate policy in the future.

　　宏觀政策“杠桿”

Export tax rebates will also be returned to enterprises in the export commodities, and export commodities will enter the international market at zero tax rate, so that the commodities entering the international market will have equal competitiveness.

The zero tariff policy of export commodities is regarded as an international practice. According to the WTO rules, no refund is required for export commodities, and the tax rebate should not exceed the tax included.

In most countries and regions, export tax rebate is simple and stable as a tax system, but in China, export tax rebate has been used as a macro policy "lever".

In order to achieve specific policy objectives, policy adjustment is very frequent.

In October 2003, the Chinese government reduced the export tax rebate rate by three percentage points.

The main reason for this is that the central government has heavily defaulted on corporate tax rebates.

Since the implementation of the export tax rebate policy in China, the adjustment of the export tax rebate rate is often the result of a trade-off between the government's financial affordability and the encouragement of exports. The strength of the central government's financial capacity determines the extent and level of the tax rebate.

In addition, the export tax rebate also plays a role in regulating the surplus and deficiency of domestic commodities and industrial policies.

In October 1995, in order to ease the tight supply of newsprint, the export tax rebate of newsprint was stopped. After two years, the supply of domestic newsprint was sufficient. Considering the development of domestic paper industry, the export tax rebate of newsprint was restored.

Overall, before 2004, the adjustment of China's export tax rebate was greatly influenced by the supply and demand of commodities.

Since then, as China's energy and raw materials supply bottlenecks, international energy prices continue to rise.

After the Central Committee put forward the requirement of "changing the mode of economic growth", the export tax rebate policy began to "leverage" the export of energy, raw materials and high polluting commodities.

In December 9th last year, the seven departments of the State Development and Reform Commission, the Ministry of Finance and the Environmental Protection Administration jointly issued a circular to control the export of high energy consumption, high pollution and resource products.

Since then, China's export tax rebate policy has experienced the stage of encouraging export to earn foreign exchange, adjusting the surplus and deficiency of domestic commodities, interfering with industrial development and promoting the pformation of economic growth mode.

In 2006, China's internal and external economic imbalance intensified, trade friction continued, foreign exchange reserves surged, and the appreciation pressure of RMB was lingering.

Behind these disagreements, they seem to loiter around the shadow of export tax rebates.

Many experts began to call for lowering the export tax rebate rate and "reducing the pressure on the renminbi".

　　商務部的擔心

How to determine the direction of export tax rebate policy adjustment in the future?

Ni Hong Li, a researcher at the State Council Development Research Center, said that the export tax rebate is essentially a policy of encouraging exports. "If we want to maintain the stability of the RMB exchange rate, it is also a policy option to lower the export tax rebate rate."

Yifu Lin, director of the China Economic Research Center at Peking University, suggested that by lowering the export tax rebate rate and slowing export growth, the trade surplus will be reduced, and the growth of foreign exchange reserves will also slow down.

For China's export enterprises, the effect of lowering the export tax rebate rate is equivalent to the appreciation of the renminbi. If the Chinese government chooses to adjust the export tax rebate policy and use non exchange rate means to ease the pressure of RMB appreciation, it will help to dispel the international expectation of RMB appreciation.

Zhang Hanlin, Dean of China WTO Research Institute of the University of foreign trade and economics, believes that China's foreign trade growth rate is over 30%, while GDP growth is around 10%. There should be a relatively balanced relationship between foreign trade and GDP.

The huge gap reflects the disconnection between the opening sector and the domestic industrial sector. We should choose to adjust the export tax rebate for RMB appreciation and decompression.

The export tax rebate policy adjustment is more active, and can be changed according to the domestic and international economic and trade situation.

Coordinating the development of foreign trade and GDP is conducive to the sustained development of the macro-economy.

However, the Ministry of commerce is worried that lowering the export tax rebate rate will increase the export cost of enterprises.

Some enterprises that originally made small profits protection products may give up their exports. Some labor-intensive products that are facing fierce competition may be forced to withdraw from the international market, and thus the growth and expansion of China's exports will be affected to varying degrees.

Ni Hong day, a researcher at the development research center of the State Council, believes that the Ministry of Commerce's worry will happen.

The National Research Center has made special investigations and studies that if the export tax rebate rate is lowered, it will have a greater impact on labor-intensive enterprises and small and medium-sized trade export enterprises.

Especially in the central and western regions, export enterprises are mainly labor-intensive and low added value. These enterprises have relatively thin margins and limited value-added space.

After the export tax rebate is lowered, enterprises may change from profit and profit to loss. In order to keep profits, enterprises may reduce staff.

　　著力平衡

Lowering the export tax rebate rate will also have an impact on foreign-invested enterprises.

Chen Shuangrong, partner of Ernst & Young Huaming accounting firm, analyzes that more than 50% of China's exports are foreign-invested enterprises, most of which are sold to parent companies and sold to other countries and regions.

If there is no tax rebate, the increased cost will have a great impact on the competitiveness of China's goods.

In particular, the products of foreign invested enterprises may not be sold to the final consumption point, and they have already assumed additional tax costs. This is not fair.

He believes that in theory, the value added tax depends on where the final consumption point is; the final consumption point should be taxed in China, where the consumption point is not in China and should not be taxed.

Li Yushi, vice president of the International Trade Cooperation Research Institute of the Ministry of Commerce, believes that the way to solve the pressure of RMB appreciation should not restrain exports and expand imports properly.

However, Ni Hong believes that if we only consider from the tax point of view, export commodities should be zero tax according to international practice.

However, considering the current RMB exchange rate issue, the policy choice must be weighed.

There are several advantages in reducing the export rebate rate, which will have an impact on reducing financial pressure, slowing the growth of foreign exchange reserves, reducing the pressure of RMB appreciation and maintaining trade balance.

Recently, experts at home and abroad, such as the Research Bureau of the people's Bank of China and the Institute of world economics and politics of the Chinese Academy of Social Sciences, have completed a research report on "China and the global economy: medium-term problems and Countermeasures".

It is pointed out that the external imbalance caused by "double surplus" in China's current account and capital account should be attributed to China's export oriented growth strategy.

China's growth is mainly driven by exports of manufactured goods, not driven by domestic consumption, nor by coordinated and balanced development of other sectors and inland areas.

The report suggests that China's industrial policies should stop universal subsidies for export activities, and eliminate or restrict policies that may distort, such as stimulating exports through export subsidies.

The elimination of distorting measures can further reduce the magnitude of the appreciation of the Renminbi; at the same time, we should improve the business environment through universal provision of public goods, including infrastructure, education, labor training, appropriate rules and regulations, property rights, contract implementation and legal norms.

Judging from the main policy trends, there is no major adjustment plan for export tax rebates in recent years, and the export enterprises concerned about policy adjustment may seem to relax their nervousness for a while.

However, there is no doubt that people who are too dependent on tax rebates will be the best way to adjust and upgrade their export commodities.