Taxman catching up on overdue rebates
By Dai Yan
Updated: 2004-07-01 08:33

China will continue to improve its tax rebate system though recent revisions ensured an efficient clearance of overdue rebates, according to a national tax and trade conference that ended yesterday.

According to Xie Xuren, head of State Administration of Taxation, a total of 287.4 billion yuan (US$34.7 billion) in overdue export rebates, or 96.7 per cent, has been paid since last October.

But Xie said the work to deal with this year's rates was still going slowly as only 27.8 billion yuan (US$3.36 billion) has been paid for the first five months.

The total budget for this year is around 210.8 billion yuan (US$25.47 billion).

Xie explained that many enterprise paid more focuses in the overdue rebate but did not submit necessary documents for the new rebate.

Xie said the tax departments would co-operate with the trade departments to beef up this year's tax rebate.

"We will try to complete the rebate in nine months this year," Xie said.

Yu Guangzhou, vice-minister of commerce, said the central government would also move to address concerns by some local governments about poor fiscal capacity, which have already felt pressure since they have to share the rebate with the central government from January 1 this year.

The central government announced in last October that the export tax rebate rate was reduced by an average of 3 percentage points from 15.51 per cent. The central government will only pay 75 per cent of the rebates that exceed the 2003 amount, with the remaining 25 per cent being paid by local governments.

Some local governments, particularly in the relatively underdeveloped regions of western China, cannot afford to pay the rebates to export firms.

And some local governments also moved to protect locally-manufactured goods by paying less rebate to exports originated from other regions.

Yu said the government is studying measures to solve the problems.

The revised tax rebate system has eased pressure on foreign trade companies who are short of capital, and did not generate negative impact on exports.

Total exports in the first five months rose 33.4 per cent to US$207.59 billion and imports reached US$216.25 billion, up 41 per cent year-on-year.

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