Export Tax Rebate Becomes Relief for Rescue Businesses

Following the increase in the tax rebate rate for some export commodities on November 1, the Ministry of Finance and the State Administration of Taxation jointly issued the "Notice on Raising the VAT Refund Rate for Product-involved Products such as Labor-Intensive Products", and exported products under the 423 tariff lines. To increase export tax rebates, the adjusted tax rebate rate will be implemented starting from December 1, 2008.
Pharmaceutical companies benefit more
Health Network Researcher Liu Jianting’s comparative analysis found that the medical products involved in this time have increased compared with the previous round. "A rough comparison, antipyretic analgesic drugs, cardiovascular and cerebrovascular categories are included in this tax increase. Such as code 2929210010 ~ 2925190090, paracetamol (customs code 29242920) in this column, aspirin (customs code 29182210 ) It is coded between 291,819,000 and 2,918,390,090. It basically includes several commonly used anti-pyretic analgesics."
In addition, clavulanic acid and its salts, growth hormone and its derivatives and structural analogues, erythropoietin (EPO), glycyrrhizic acid powder, choline and its salts, glutamic acid, etc. The rate of tax increase is all at 4%. Relatively speaking, this time, the scope of taxation for bulk drugs and medicines is relatively wide, involving two types of APIs: antipyretic analgesia and cardiovascular and cerebrovascular.
For this tax hike, Qiao Haili, director of the Western Medicine Department of the China Chamber of Commerce for the Import and Export of Chinese Medicines and Health Products, feels a bit sudden: “In the past, we first sought our opinions. This time it was posted directly. We need to study it carefully.”
“This tax increase is mainly aimed at lowering the tax rate in June last year. Because of the export tax rebate adjustment, in addition to penicillin and vitamins, the export tax rebates for raw material drugs have been widely used, which has a large impact. This year’s export was affected by the financial crisis. The situation is grave, so to stimulate exports, the government gradually selected the varieties of tax reductions last year and continued to raise them one after another, which is why the bulk raw medicines such as antipyretic and analgesic drugs are also included in the tax rebate list. "Qiao Haili said.
“Actually, the rate of increase in tax rebates for many APIs has not reached the level before the reduction of tax rebates in June last year. However, any increase in tax rebates will have a positive effect,” said Qiao Haili.
Macro-oriented stimulus export
For this increase in tax rebates, Huayun International's general manager Wang Yunbiao believes: “This can effectively improve the competitiveness of our export products. In the export of bulk drugs, the competition between India and China has always been great, and the price is the main advantage of our country. One of them can also stimulate the export of our products."
"But stimulating the economy to increase exports requires a series of combinatorial punches. Tax rebates are one of the most direct and most effective ways to achieve rapid results. But in reality, the government can do a lot, such as helping companies improve their marketing capabilities and guide companies to develop additional value. High products, etc." Wang Yunxi said.
“For the future export situation, affected by the financial crisis, I think that some patented drugs with high prices may be limited to a certain extent in the future, while some affordable generic medicines and basic medicine markets may be enlarged. So I speculate. In the past few years, the financial crisis may have led to an increase in the export volume of generic pharmaceutical raw materials. Therefore, stimulating exports in the form of increasing export tax rebates will amplify the aforementioned advantages in the context of the global crisis." .
The person in charge of an antibiotic company in Hebei also analyzed with reporters that the RMB exchange rate has been stable at around 1:6.8, which is not the same as the previous two years at 1:8, and that the deficit was made up by raising export tax rebates. It is also very unrealistic. However, raising the tax rebate at least shows the government's attitude. One is to raise the confidence of enterprises and investors, and the other is to guide enterprises to change the growth mode.
“However, there is another issue that deserves attention. That is, although the export tax rebates have been raised, the time for the state to refund the tax to enterprises is getting longer and longer. It may also be that the current macroeconomic problems are relatively large, and they are financially unable to attend. The export tax rebate rate is a good thing, but from an enterprise point of view, it also hopes that the government will implement the tax rebate in time," said the person in charge.
Contrary to the increase in the tax rebate rate for some export commodities, on November 9, five citric acid producers were prohibited from exporting products because the pollutants were not up to standard. The Ministry of Environmental Protection will occasionally conduct environmental verification on the citric acid production enterprises that apply for the annual inspection. Only enterprises that apply for and meet the standards will have production and export permits.
“I think the government's dominant ideology is still very clear. It is to promote the transformation of economic growth mode and the transformation of the industrial structure. You see that in the last two catalogues, there are relatively few “two high and one capital” types, or they are High-value-added products, such as potassium clavulanate, have only two or three domestic enterprises and have relatively high technological content. The EPO is also the only way to ease the employment pressure and increase the tax refund for labor-intensive products, said the responsible person.

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