October 23, 2008

 

China hikes tax rebates for aqua-exports

 
 

China's central government announced Tuesday  (October 21, 2008) that tax rebates for export of aquatic products will increase from 9 percent previously to 13 percent.

 

The products mainly includes tilapia and other frozen fish, smoked fish, crustaceans animals, cold, dry cuttlefish, squid, octopus.

 

Fresh or frozen boneless beef is also included on the list of products eligible.

 

The TtThe increment of tax rebates would help raise profitability for export processing enterprises.

 

The higher rebates would help enterprises that have higher proportion of exports and lower profit margins.

 
China's seafood processing companies, particularly those engaged in exports, are facing unprecedented difficulties, mainly due to five reasons: the depreciation of the US dollar and the appreciation of the RMB, the slowdown in external demand, reduced cash flow of foreign distributors, a new labour law increasing labour costs and  a food safety incident involving poisonous dumplings earlier in the year.

 

Given these factors, the first three of which were beyond the control of the industry, a lifting of the export tax rebates would hardly be able to halt the slide in seafood export volumes.