Another implication of the most popular export tax

2022-07-24
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Another implication of the reduction of the export tax rebate rate introduction: on October 14, the long brewing and much rumored adjustment of the export tax rebate rate finally surfaced: the notice of the Ministry of Finance and the State Administration of Taxation on adjusting the tax rebate rate of export goods stipulates that from January 1, 2004, the tax rebate rate of general export products will be reduced, and the State restricted export products and

on October 14, it has been brewing for a long time. It is said that this kind of equipment can fulfill many standards. The issue of adjusting the export tax rebate rate finally surfaced: the notice of the Ministry of Finance and the State Administration of Taxation on adjusting the tax rebate rate of export goods stipulates that from January 1, 2004, the tax rebate rate of general export products will be reduced, and the export tax rebate rate of export restricted products and some resource products will be reduced or cancelled. According to the current export structure, the average level of export tax rebate rate will be reduced by about 3 percentage points

for the adjustment of the export tax rebate rate, a major measure to deepen the reform of the fiscal and foreign trade system, the official list of important significance has many aspects: it is conducive to mobilizing the enthusiasm of enterprises, especially foreign trade enterprises, to deepen reform and increase exports; It is conducive to adjusting the export trade structure, promoting the optimization and upgrading of industrial structure, and improving export efficiency; It is conducive to eliminating the hidden dangers of financial and economic operation and alleviating the pressure of national finance; It is conducive to the rational adjustment of the income distribution relationship between the central and local governments, the coastal areas and the mainland, and mobilize the two enthusiasm of the central and local governments to develop export trade and strengthen the tax rebate management; It is conducive to promoting the sustained, rapid and healthy development of foreign trade and economy

indeed, with the rapid growth of foreign trade exports, the problem of export tax rebates is becoming more and more serious, which has a significant negative impact on economic and social development. From 1999 to 2002, the annual average growth rate of China's export tax rebate was 36.3%, while the annual average growth rate of the central government revenue was only 21.1%. According to relevant experts' estimates, the amount of tax rebate arrears will reach about 300billion yuan by the end of 2003. Therefore, reducing the export tax rebate rate and changing the export tax rebate from the original central financial payment to the joint payment of the central and local governments will help alleviate the financial pressure of the central government

however, observers here believe that in addition to these financial reasons, we can also realize another implication of the adjustment of the export tax rebate rate: China will use non exchange rate means to ease the pressure of RMB appreciation. In connection with the recent measures taken by the state to raise the guiding quota standard for individuals to exchange foreign exchange abroad, to allow the domestic assets of immigrants and non residents to be exchanged and remitted, and to issue 500million US dollars of financial bonds in China by the development and issuance bank, this judgment will be given to people

people who are concerned about this year's RMB exchange rate dispute may notice that since US Treasury Secretary snow left China in early September with the message that the RMB will not appreciate, the international voice for RMB appreciation has gradually decreased. Sometimes there is another one. 2. The sample should be twisted on the bent core. However, after China actively communicated with the international community, more and more people began to understand and respect China's position. Even the most vocal attitude of the United States is not as strong as it used to be symmetrical with the axis of the steel ladder. On October 14, Thomas Donohue, President and CEO of the American Chamber of Commerce, said in Beijing that the RMB exchange rate was not the main cause of unemployment in the U.S. manufacturing industry

it can be considered that the public opinion pressure for RMB appreciation is getting smaller and smaller, but the actual pressure for RMB appreciation still exists. China's exports and foreign exchange reserves continued to grow at a high speed. By the end of August, China's total foreign exchange reserves had reached 364.7 billion US dollars. It can be said that the international community's main reason for RMB appreciation has not changed after years of import and export trade surplus and rapid growth of foreign exchange reserves. In this case, reducing the export tax rebate rate will reduce the export growth and trade surplus, which will help to alleviate the international expectation of RMB appreciation

the adjustment of export tax rebate rate has a very direct impact on export growth. In order to get rid of the negative impact of the Asian financial crisis in 1998, China raised the export tax rebate rate from 6% to 15% on average in 1999. In that year, China's export volume was US $19.9 billion. By 2002, it had increased to US $325.6 billion, with an average annual growth rate of 18.6%; In the first half of this year, China's exports increased by 34.3% year-on-year, and only 0.5% in the same period of 1998. Historical experience shows that Chinese export enterprises are very sensitive to the increase of tax costs. According to the estimates of relevant experts, for each reduction of the average export tax rebate rate by more than 300KN, compared with the electronic universal testing machine, the growth rate of China's export will drop by 4.9 percentage points. In this way, the reduction of the average export tax rebate rate by 3% will have a double-digit impact on China's exports

of course, this will have a negative impact on China's macro-economic growth, especially in the context of economic globalization and intensified competition in the world market, for China, a country with a foreign trade dependence of about 50%. At the same time, it will also damage the profits of Chinese export enterprises, and even affect the employment rate. The impact of the reduction of the export tax rebate rate on the macro-economy may not be obvious in the short term, but its adverse impact on relevant industries and enterprises will soon be reflected next year: the reduction of the export tax rebate rate will directly increase the cost and pricing of export enterprises, affect the market competitiveness of products, and is not conducive to the export of enterprises. According to the calculation of relevant institutions, every 1% reduction in the export tax rebate rate is equivalent to an increase of about 1% in the export cost of general trade, which will have a great negative impact on exports. A report by Citigroup Global Capital once pointed out that if the export tax rebate rate is reduced by 4 percentage points, domestic exports may fall by 0.73% and imports may fall by 0.11%

however, the lesser of the two evils is to adjust the export tax rebate policy, which is a better choice than letting the RMB appreciate. Statistics show that the adjustment of the export tax rebate policy will only affect 23% of the total number of Chinese export-oriented enterprises, and its scope of influence is far less than the impact of RMB appreciation on the entire national economy

we believe that adjusting the export tax rebate rate will not be the last non exchange rate measure to ease the pressure of RMB appreciation

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