Tariff Regulations Adjustment Creates New Chances to Wine Industry

It’s said that Draft Plan for Development of Light Industry has submitted to Industry and Technology Department and expected to release around two conferences in March after getting the approval of National Development and Reform Commission and the State Council. According to the draft plan, the government will put food industry and home appliances industry etc. as the focus of development and will further decline commodities consumption tax whereas increase import consumption tax on wine, cosmetic, jewelry, watches etc.

“The draft plan jointly draw up by Industry and Technology Department and National Light Industrial Union should be verified by National Development and Reform Commission and the State Council. Moreover, tax deduction items should also get support from Ministry of Finance. Due to these uncertain factors, industries are watching and waiting to see what happens on the regulation”, one analyst said.

As one experienced businessmen of red wine sector said that nowadays import rate of red wine is low to bottom. In accordance with WTO Agreement, import tariff rate for red wine with or under two liter package capacity had declined to a lowest rate of 14% and remained the same since January 2004 till now except for Chile and New Zealand that signed “Free Trade Agreement” with China. Based on the agreement, Chile declined import tariff rate from 14% to 10% on October 1, 2006 and will completely remove tariff on October 1, 2015.Whereas, New Zealand declined import tariff rate from 14% to 11.2% on October 1, 2008 and will completely remove tariff on January 1, 2012.

The analyst revealed that even if government removes 14% of import tariff rate, the imported red wine price for Mainland is much higher than that of western countries and Hong Kong due to 11.1% consumption tariff rate and 17% value added tax rate of all together 30% of C.I.F and price of Ex-Works imposed on imported red wine and domestic made respectively.

As for these members, a responsible person of an international red wine company of China said that value added tax will affect all the commodities while consumption tax have effect on luxury articles only but not much chance of tax declining.

He also indicates that consumption tax reduction is good for red wine maker, after all it can reduce the burden of enterprises and red wine market price.