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The Ministry of Finance has announced the adjustments to its value added tax rebate, which will become effective December 1st. The announcement follows the decision that was made by the State Council on November 12th.
At the just-finished China Import and Export Fair in Guangzhou, a Jiangsu-based textiles company signed a large contract with a foreign firm. But due to the credit crunch, its client asked to delay the payment for goods for two months. Considering the appreciation of the yuan, as well as the depreciation of both the euro and the Australian dollar, the domestic company might have broken even or even posted a loss for the transaction.
Just as the firm was deciding how to reply to its client, the government raised the export tax rebates for textile products, helping to solve the problem just in time.
Jing Yutang, Board Chairman of Jiangsu Tevel Group said "Thanks to the adjustments, we will not only avoid losses in the contract, but make a profit."
China has launched a series of tax adjustments to help its exporters this year. More and more textile producers are benefiting from the change.
Shao Litao, Board Chairman of Handan Sunman Textile said "The tax rebate hikes will help us greatly increase this year’s profits. It will also give us more leverage while negotiating with foreign companies."
It’s predicted that growth in textile exports will fall this year. But it may still maintain a growth rate of 8 percent. The adjustments to the export tax rebates are expected to increase industry profits by at least 5 billion yuan.
( Source from China Daily )
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