China to improve export tax rebate system
( 2003-10-10 00:32) (Xinhua )
Chinese Premier Wen Jiabao Friday urged all localities across the country to
work to facilitate reform on the export tax rebate system which may have an
impact on the benefits of local governments.
Wen said at a meeting on the reform that with the rapid growth of China's
exports, the problem that the share of tax fails to be refunded to enterprises
has become increasingly prominent. This has affected the normal operation of
export-oriented enterprises, especially those engaged in export business.
The premier attributed the failure to the unreasonable export tax rebate
mechanism, saying it failed to meet the needs for industrial restructuring and
the volume of the rebates has grown far beyond the capacity of the central
finance. As a result, "the more rapid exports grow, the heavier the financial
burden the central finance faces," Wen said.
To reform the current export tax rebate system, he said, efforts should be
intensified to deepen the reform of the financial and foreign trade systems,
which will help improve enterprises' competitive edge, export product mix and
the efficiency of export business, alleviate the government's financial burden,
promote exports and enhance management of tax refunding.
China has accumulated sufficient foreign exchange reserves thanks to years of
fast growth in economic development and exports as well, which creates a good
condition for the reform, Wen said, stressing, "we must lose no time to promote
the reform."
According to Wen, plans have been drawn out for the reform after mass
investigations. The major reform measures cover readjustment of the export tax
rebate rates, with the increased share of rebated tax paid by both the central
and local fiscal departments.
As an import part of the reform, the value-added tax on imports and income of
consumption tax will be first used for tax rebate, and the arrears of what
should be refunded to export enterprises will be paid by the central finance,
Wen said.
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