'China cabinet approves export rebate cuts'

Beijing, Sept 7: China's cabinet has approved plans to cut export tax rebates for products that consume too much energy and natural resources to help curb exports and ease upward pressure on the yuan, government sources said on Thursday.

The approval by the State Council would pave the way for cuts in tax rebates on a wide range of goods produced by industries including steel, textiles and metals, the sources said.

They said the cuts were scheduled to take effect before a major trade fair to be held in the southern city of Guangzhou in October.

The plan, drafted by the finance and commerce ministries, the tax administration and the National Development and Reform Commission, China's main planning agency, had obtained the State Council's approval, said one source.

''The step is aimed at slowing the over rapid rise in exports and at taking some of the heat off the renminbi,'' another source said. It would also help China to move up the value chain.

Under the plan, tax rebates for exporters of coal and certain mineral ores would be abolished, while tax rebates on certain high-tech products would be increased, the sources said.

Companies would be given a three-month transitional period to adapt to the tax changes, they said.

Chinese officials have repeatedly pledged to reduce tax rebates on exports to help reduce the country's hefty trade surplus, which has fuelled upward pressure on the yuan.

State media have said export tax rebates for textiles, metals and steel products would by reduced by an average 2 percentage points.

The sources had no word on what would happen to export rebates for refined metals and metals products.

Industry officials said last month that Beijing had decided, in principle, to reduce the rebate for value-added tax on exports of aluminium products such as extrusion, plates and foils.

China has long granted rebates on some exports for which it charges 17 percent valued-added tax.

The rebates currently range from 13 percentage points for aluminium products, lead and and copper products to 11 percent for steel products and 5 percent for tin and refined copper and zinc.

REUTERS

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