S. China province raises tax rebate rates to shore up foreign trade firms amid epidemic
Over 1,000 types of exports ranging from porcelain sanitary, construction accessories and auto parts to farm produce have enjoyed increased tax rebate rates starting from March 20, according to the provincial administration of taxation in China's export powerhouse of Guangdong.
The administration lifted the export tax rebate rate for 1,084 categories of exports including porcelain sanitary wares, new plastics, knives and scissors, construction accessories and auto parts from 10 percent to 13 percent, that for another 380 items such as plant growth regulators to 9 percent, and that for agricultural products and fresh meat products from 6 percent to 9 percent.
The administration estimates that based on the export situation in 2019, the adjustment of the export tax rebate rates will contribute 1.31 billion yuan (185.5 million U.S. dollars) of export tax exemption funds to 12,000 enterprises in Guangdong throughout this year.
The tax rebate adjustment covers export commodities worth 6.17 billion U.S. dollars in Guangdong. The provincial government has learned that export firms have been gravely affected by the delayed production due to the coronavirus outbreak, which has shrunk the export demand.
Guangdong Monga Intelligent Kitchen &Bath Co., Ltd., a leading ceramic sanitary ware exporter, said since March, overseas orders have been falling sharply, further intensifying the pressure on the company to turn over funds.
"I had been worried about the company's cash flow. I didn't expect the tax bureau to directly increase the tax rebate rate by 3 points," said Zhang Liu'an, chairman of the Guangzhou Xiongxing Plastic Products Co., Ltd.
He said the private firm manufacturing plastic products has 30 percent of the exports destined for India. The epidemic situation around the world has brought uncertainties to the company's business.