Ministry Of Finance ,Taxation Bureau: Q&A on Improvement Of Export Rebate Rate F

With approval from the State Council, the Ministry Of Finance and State Administration for Taxation have jointly issued the notice that the export rebate rate of textile, costume and toy will be improved on November 1, 2008. Recently, the persons in charge of Ministry of Finance Taxation Bureau and State Administration for Taxation Cargo and Service Tax Bureau gives replies to the reporter on relevant problems on adjustment of export rebate rate of partial commodities.

Q: What aspects are mainly taken into considerations for this policy adjustment?
A: Since the beginning of this year, owing to international market demand weakening, RMB upvaluation, raw material price and labor cost increase and other factors, the export increase rate in our country is slowed. In the past 9 months, 8 months have the export increase rate lower than that of the previous year. All export enterprises have the profits decreased largely, especially those medium and small-sized enterprises with concentrated labors and wide employment scope but weak risk resistance ability and large operation pressures.

With larger influences from financial crisis in the U.S., the resident consumption confidence indices in developed countries have decreased largely, and the import demands are dropped, which will surely cause adverse effect on the export of our country. If relevant measures are not taken, the export quantity will be expected to drop in future, and export enterprises will face more difficulties, which will surely cause adverse effect on development of internal economy in our country. Therefore, it is necessary to properly adjust relevant fiscal policies, help enterprises to set up confidence and avoid any influence on the economic development in our country owing to large decrease in export.

Q: What are main contents of this export rebate adjustment?
A: This export rebate adjustment mainly concerns two aspects: the first is to properly improve the export rebate rate in textile, costume, toy and other labor-intensive goods, and the second is to improve the export rebate rate in anti-AIDS medicine and other goods with high-tech contents and high added values.
After this adjustment, the export rebate rate is divided into six levels of 5%, 9%, 11%, 13%, 14% and 17%.

Q: What influences will this policy adjustment have?
A: This export rebate adjustment is a policy based on enlargement of domestic demands to improve enterprise competitiveness of exports and support enterprise to expand exports, which has positive acceleration for development of the whole national economy. To improve the export rebate rate of labor intensive products may enhance the ability for enterprise to defend against market risks, support small and medium-sized enterprises to overcome operation difficulties for healthy development, and help further promotion of labor employment in both urban and suburb areas. To improve the export rebate rate of high-tech products with high added values may help leading enterprises to optimize export product structure and accelerate industry upgrading.