Clothing export tax rebate adjustment advantages and disadvantages geometry?

Opposition party: Tax rebate enhances international competitiveness After seeing the production and sales report in the first quarter, Lin Fengshan, head of the Ministry of Foreign Trade of Jinjiang Huafeng Weaving Printing and Dyeing Industrial Co., Ltd., was quite impressed: even after having cooperated with IKEA for many years, it felt increasingly difficult. . "Because there are too many competitors, there have been many other countries' suppliers to compete for IKEA orders this year, mostly suppliers from Southeast Asian countries such as Vietnam."

It is not only that Huafeng has encountered competitors from Southeast Asian countries. At the Canton Fair this year, many exhibitors also speculated that the reduction of European and American merchants was mainly due to the shift to Southeast Asian countries for procurement.

“The labor costs in these countries are low, and the product prices are correspondingly lower. Now that our domestic companies have to raise their prices due to high overall costs, their competitive advantages will become more apparent. In fact, the qualified international buyers are good for China. The export tax rebate policy knows very well that companies basically give this part of profits and profits to them in order to increase the price advantage. If the tax rebate is lowered at this time, product prices will inevitably increase, and our domestic companies will be even less competitive.” Lin Fengshan believes that although Most companies do not have much "tax rebate" cake, but this piece of cake will help China's textile and garment export companies to attract international buyers.

According to rumors, more than one hundred tax codes for apparel products may be included in the new round of tax rebate reduction, and there is a suggested reduction of up to 5 percentage points. Once on the line, the clothing tax refund rate will be reduced from the current 16% to 11%. . In this regard, Wang Qiang, chief analyst of First Textile Network, gave a set of data analysis in an interview with the media. In 2010, China textile export tax rebate amounted to about 210 billion yuan, accounting for 28.8% of the total national export tax rebate. According to a simple calculation, if the tax rebate is lowered by 5 points, the textile and apparel export tax rebate will be reduced by about 65 billion yuan, equivalent to 1/3 of the total textile industry profits. "If rumors come true, it will certainly cause a heavy blow to clothing exports in the short term."

An industry analyst who worked in export enterprises in Quanzhou analyzed that if the tax rebate were lowered, it would have a fatal blow to many low-profit textile and apparel export enterprises. According to industry sources, the company's company's gross profit margin is about 5%, which is already in the industry's upper level. "If the tax rebate is reduced by 5%, it will be very difficult for our business to bear. Moreover, our customers are relatively high-quality, and our products are diversified with certain bargaining power. For a single company with a single product, it is estimated that all the merchants have run away. It went bankrupt."

The above-mentioned person's analysis was approved by many export companies including Zhongtian Garment Weaving Co., Ltd.

"According to the country's current adjustment of industrial policy, the tax rebate reduction is inevitable from a long-term perspective. But at this time, companies are under pressure from various sources and it is estimated that they can't afford it. They hope that they can give enterprises a buffer period in the short term." Lin Fengshan said.

National statistics show that last year, China’s export strength picked up, and its annual export growth rate reached 31.3%. Even the textile and apparel products that were hardly viewed at the beginning of last year, after twists and turns, also reached a growth rate of 23%. In the first quarter of this year, they continued to increase by 24% year-on-year.

However, the foreign trade situation that seems to be hidden behind the beautiful growth data is not very optimistic. At this time of the Canton Fair, the crowded and throbbing scenes did not bring happiness to exporting companies. On the contrary, under the pressure of huge costs, the living conditions of many SMEs are worrying.

“Using our company as an example, the single product, thin margin, and short bill are the main factors, and these three factors determine that we cannot withstand the pressure of tax rebate reduction. At present, the company is also striving to innovate products, expand product range, and contact new customers. It will take some time before results can be achieved,” said Xue Mocai, head of Zhongtian apparel marketing, which mainly produces underwear.

“Even if the adjustment is not too large, it is recommended that the adjustment rate be controlled within 1 to 2 percentage points during the year and try to maintain a relatively stable export environment.” The above-mentioned industry insiders of Quanzhou export enterprises suggested that there is still pressure to maintain growth in textiles and clothing in the short term. It is unlikely that the rebate rate will be substantially lowered.

Supporting parties: Refunding Tax-raising and raising enterprises The development of inertial textile and clothing export enterprises with excessive dependence on tax rebates has caused the relevant economic departments in Jinjiang City to be quite worried.

"The development of China's export tax rebate policy has gradually deviated from the neutral track. Over-support for foreign trade export enterprises has instead played a counter role, resulting in some low-level export products that do not have competitive advantages rely on tax rebates to survive. This not only promotes growth through exports. The fact that the original intention was greatly compromised has also affected the pace of industrial upgrading.” The person in charge of the relevant department of Jinjiang City stated that the export tax rebate should have been an international tax that has been imposed on some or all of the returned export products from the perspective of avoiding international double taxation on exports. This is a supportive policy to boost development, but it has become an umbrella for some low-end export companies, and has developed the inertia of the company's development.

In the export industry, some foreign trade companies that benefit from export tax rebates are also quite contradictory to the existence of tax rebates. “We are passive because of the existence of export tax rebates. When they identify this profit, it is very difficult to accept the price increase. As a result, the prices of the entire industry are difficult to increase, so most companies choose To make low-priced mass products go to the low-end market. Once it is labeled as 'low-end goods', it will be very difficult to get high-end orders," said Wang, head of a foreign trade company in Quanzhou.

In addition, Mr. Wang was very angry about the “false export tax fraud” incident that took place two consecutive years. “More than 3 million fake export companies in Yunnan's Tengchong Top 100 companies; a company in Gansu Province accepts false value-added tax invoices and defrauds export tax rebates of nearly RMB 20 million. Each year, as long as export tax rebates are adjusted, many false invoice tax frauds will emerge. As far as I know, there were dozens of companies in Jinjiang last year and the policies were deceived, which has a great impact on the interests and reputation of the entire industry."

Based on this, some people in the industry, including Mr. Wang, and relevant government departments believe that, at an appropriate time, export tax rebates should be gradually reduced until cancelled. The tax rebate can be successfully implemented in the textile and apparel industry, and will set a good start for future export policy adjustments.

"Longer pain is worse than short pain. After blocking the back road, we can force companies to seek improvement, to develop at a higher level, and to standardize the healthy development of the industry. Only in this way can we really boost the industrial upgrading." The person in charge of the relevant department said.

A few days ago, Chen Dongqi, deputy director of the Macroeconomic Research Institute of the National Development and Reform Commission, appealed in an interview with the media: “The country’s 40 trillion GDP, tax revenue accounts for about 10 trillion. The government has the ability to cut taxes, it should carry out structural tax cuts, and support enterprises to improve The ability to innovate, support residents to expand consumption, and support the transformation of economic development."

In this regard, the person in charge of the above-mentioned departments expressed their agreement and believed that the tax rebates for export enterprises are not as good as those for export enterprises. “The proportion of domestic revenue to GDP is too high, which is much higher than that of foreign countries. This shows that necessary structural tax cuts are necessary. Moreover, export tax rebates have excessively supported export enterprises, resulting in speculative protection policies for low-end export companies. The survival of the fittest in the process of industrial upgrading."

In addition, there are also business people believe that in the country, companies have to pay taxes from production to logistics and transport, and then to the terminal. Taxes on exports and domestic products have been unequal. If the general reduction of the corporate tax rate is adopted, it will be conducive to the establishment of an environment that treats both domestic and foreign products on an equal footing and encourages the free and reasonable flow of resources in both domestic and foreign markets.

Many companies that tried to transfer from export to domestic also expressed that the domestic tax burden was too heavy, and the development of enterprises that had just started in China was limited. "If resources can be transferred back from abroad, in the face of deterioration of the external economic environment, companies can effectively cope with the impact. Moreover, this is also good for consumers. If we can replace the export tax rebate by reducing corporate tax rates generally, It will help reduce the company's cost and price increase expectations, and thus ease inflation, so that domestic consumers benefit directly.” The above-mentioned companies said.

Related links Textile and apparel export tax rebate rate adjustments in March 1985, announced from April 1, 1985 on export products tax refund policy.

In July 1995, the textile and apparel export tax rebate rate was reduced from 13% to 10%.

In December 1996, the textile and apparel export tax rebate rate was lowered from 10% to 6%.

In January 1998, the textile and apparel export tax rebate rate was raised again to 11%.

In January 1999, 11% of textile and apparel export tax rebate rate was raised to 13%; in July of the same year, the textile export tax rebate rate was raised from 13% to 15%, and the clothing tax rebate rate was increased from 13% to 17%.

In July 2001, the export tax rebate rate for cotton yarn, cotton cloth and cotton products was raised from 15% to 17%.

In January 2004, the export tax rebate rates for textiles and apparel were reduced from 15% and 17% to 13% respectively.

In September 2006, the textile export tax rebate rate was reduced from 13% to 11%.

In July 2007, the clothing export tax rebate was reduced from 13% to 11%.

In August 2008, the export tax rebate rate for some textiles and apparel was raised from 11% to 13%; in November of the same year, it was again increased from 13% to 14%.

In February 2009, the textile and apparel export tax rebate rate was raised from 14% to 15%; in April of the same year, it was again increased from 15% to 16%.

“You said, will the export tax rebate be lowered?” This has become a greeting to the textile and garment industry in Quanzhou recently.

The rumors that “tax rebates for textiles and garments will be lowered or will be lowered” have been circulating in the market since early April. Although not confirmed by the relevant government departments, during the Canton Fair, with the decline of purchasing enthusiasm of traditional European and American merchants in the major markets, this rumor has increasingly become a stone in the hearts of textile and apparel companies in Quanzhou.

For Quanzhou textile and garment export enterprises, which are mainly labor-intensive, what kind of effect does the 16% tax rebate cake have on business survival and industry development? Is the existence of tax rebates more profitable or more disadvantageous? Rumors once again caused the industry to discuss.