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China to End Imported Steel Tax Policy
2014-07-16 22:44:00   Source:   Hit:

The Ministry of Finance, General Administration of Customs and State Administration of Taxation in China have announced their intent to end its tax protection policy originally designed to boost foreign trade. This said, import taxes and tariffs are to be levied with effect from 31st July on nearly 80 products including steel wire and electrical steel. The change in policy has, however, no retrospective effect with regard to transactions in which shipping orders were signed before 31st July.

Analysts were reported to have commented on the reason behind the change of policy – China now needs to encourage the use of domestic steel. This might explain why there will be no more tax protection for steel imports predominantly involving hot-rolled and cold-rolled steel coils, which amounts to over 6 million tons – nearly half of the total national imports.

Following the cancellation of relevant tax protection policies, it is estimated that a large number of imported steels will lose their pricing advantages and stand on a levelled playing field with domestic steels. The booming Chinese economy marks that the differential tax treatment and policies imposed on foreign and domestic companies will be marginalised. This should be a matter of concern to foreign companies seeking to trade with Chinese companies.