Keynote encourages new import and export tariff schemes to be announced

Two weeks ago, the news that the fertilizer export tariff policy might be adjusted in 2013 was circulated in the industry. There are two main changes in the market's arguments: first, the export tariff for fertilizer off-season will be reduced from 7% to 2%; second, the off-season fertilizer exports The time will be extended from 4 months to 5 months.

Many interviews were informed that next year's fertilizer export tariff policy should be adjusted. As for the downward adjustment, the Ministry of Finance recommends that the export tariff for fertilizer off-season be reduced from 7% to 5%, only two points.

Not only that, the new Tariff (2013 Tariff Implementation Plan) document to be released this month includes not only the tariff changes of fertilizers, but also the addition and adjustment of import and export tariffs on steel products, non-ferrous metals and some agricultural products (temporary tax rate).

Usually, this document is led by the Ministry of Finance every year to consult with the experts of the enterprises and the Customs Tariff Commission of the State Council. After discussing these opinions with various departments such as the Ministry of Commerce, the National Development and Reform Commission and the Ministry of Agriculture, an overall plan will be formed in mid-December to cover the country. Approved by the review, and finally approved by the Premier of the State Council, issued by the State Council Tariff Commission. The plan will be implemented on January 1 of the second year.

This adjustment is mainly aimed at products with more serious domestic overcapacity. The policy is to encourage more exports, allow enterprises to participate in international competition, reduce artificially high tariffs to adversely affect certain industries in China, and promote excess production capacity. Digestion, that is, the main direction is to reduce the tariffs on some of the import and export products.

Fu Peng, chief macroeconomic adviser to the Galaxy News Agency, said: "This line of thought is correct. Now domestic demand will remain relatively stable in the next few years. It depends on the needs of overseas countries and even third-world countries to boost and digest China. Domestic production capacity, otherwise it cannot be digested by the domestic market alone, this alternative demand is necessary in the transition process.” “Financially, the tax revenue will be lowered, and in the end it may be not only tax relief, but also an export tax rebate to stimulate this. For overseas demand, this is all possible.” Fu Peng said.

Two months ago the conference "On the issue of tax adjustment in the fertilizer industry, our industry associations and the top five business leaders have jointly reflected to the Ministry of Finance, the National Development and Reform Commission, the Ministry of Commerce and other departments many times." A fertilizer industry association said, " In early November, we also made a special report to the relevant leaders of the Financial Department of the Ministry of Finance."

Not only the fertilizer industry, but also many industries such as steel, chemicals, fertilizers, raw materials, and agricultural products participated in the conference.

At that time, the Department of Taxation of the Ministry of Finance had devoted one day to solicit opinions and suggestions from different industries on the adjustment of import and export taxes in 2013. The participants were mainly from the Advisory Committee of the State Council's Tax Committee, most of whom were industry associations and business leaders.

The speaking time for each industry representative was five minutes. The meeting was chaired by Wang Wei, Director of the Customs Department of the Ministry of Finance. The purpose of the meeting was to prepare for the adjustment of tariffs in 2013.

At the meeting, Wang Wei said: “The overall direction of tariff adjustment in 2013 is to reduce taxes and encourage imports and exports. Because the current economic situation is not good, many industries have very difficult living conditions, overcapacity and imports of raw materials from overseas. Pressures are relatively large, production and management have encountered great difficulties, so the tax policy will be adjusted accordingly."

Considering the export of chemical fertilizers as a microcosm of overall foreign trade, it is not excessive.

A person from the Ministry of Commerce who just attended the Canton Fair last month said: "The current export situation is rather poor, even worse than in 2008."

Industry Opinions Since the beginning of this year, the export situation of chemical fertilizers has been rather severe, which has led to increased competition in the domestic market and decreased profitability of enterprises. The industry needs to ease production pressure through exports. “In the current situation where the operating pressure of the fertilizer industry is relatively high, the adjustment of export tariffs will help enterprises to emerge from the crisis.” A high-level peasant group told this reporter.

The data shows that in the first three quarters, China's fertilizer production was 57.32 million tons, an increase of 13.7% year-on-year; exports were 10.75 million tons, a year-on-year decrease of 11.7%. From a product perspective, urea was exported at 2.6 million tons, up 36.2% year-on-year; DAP was exported at 2.7 million tons, down 6.3% year-on-year; and monoammonium phosphate was exported at 380,000 tons, down 51.2% year-on-year.

Representatives of the fertilizer industry put forward three opinions at this meeting.

First, from the beginning of next year, the “window period” setting for fertilizer exports will be abolished; secondly, the lowest 7% export tariff currently adopted by the fertilizer industry will be reduced to 1%, to moderately encourage exports to digest domestic production capacity; It is proposed to exempt the current import ** and domestic ** taxation to reduce the raw material cost of domestic fertilizer companies. The “window period” refers to the time period during which the country applies preferential tariff reductions to certain import and export goods and products at a certain period. In order to ensure the supply of domestic chemical fertilizers, China adopts stricter export-restriction policies for nitrogen fertilizers and phosphate fertilizers. From the time point, China exports nitrogen fertilizers and phosphate fertilizers into off-season and peak seasons, and imposes a high tariff of 110% during peak seasons to ensure domestic supply. Set export tariffs based on export prices, the minimum rate is 7%.

According to the tariff policy issued in early 2012, the nitrogen fertilizer season is 1-6 months, November and December, and the off-season is July-October. Phosphorus fertilizer season is 1-5 months, October-December, and the off-season is June-September.

The aforementioned person from the Ministry of Commerce stated: "The significance of the window period is weakening."

Take the urea export as an example, follow the light season system, that is, from July to October is divided into the off-season and implement a tariff of 7%. The intention is to miss the fertilizer preparation period of the dealers and avoid the conflict between domestic fertilizer and export. However, in the light of changes in the industry in recent years, this practice of dividing seasons and seasons does not make much sense.

The first is the practice of exporting "bonded areas" and "harvest in advance". Second, under the background of excess capacity, there will not be too many dealers to prepare goods in advance. As a result, there has been a contradiction that the prices of fertilizers cannot be used in the off-season and the price of fertilizers cannot be used during peak seasons.

At present, there is a serious surplus in the domestic chemical fertilizer industry. With the increase of domestic urea production facilities (about 4 million tons of production per year), this problem has become more serious. Although there will be some small urea enterprises closed down during the period, the overall scale is still very large. Big. In 2013, it is conservatively estimated that the total capacity of domestic urea enterprises will exceed 75 million tons.

“We will reduce the current 7% minimum export tariff in the fertilizer industry to 1% and the Ministry of Agriculture may have opinions,” said a person from the Ministry of Commerce.

This is because the country has to take into account the interests of farmers while reducing the urea export tariffs. If a large amount of urea is exported due to tax cuts, it will cause high prices in the domestic market next year, which will damage the interests of farmers. This is not what the government wants. “We only mentioned these three recommendations and we can't estimate them all, but we will surely realize that some of them have been implemented. The fertilizer industry is currently the most difficult business, and companies generally suffer losses and need urgent support from national policies.” According to informed sources of the above-mentioned fertilizer industry association, “It may be suggested that the off-season export tariffs for chemical fertilizers should be reduced to 1% in the off-season. However, the news recently heard is that it may only be reduced from 7% to 5%, that is, only two percentage points. These have not yet been finalized.” “We also suggested that if taxes cannot be directly eliminated, then we must also correct the current taxation policy on imports and domestic differences. At present, the policy we adopt is that domestic There is a 50% tax incentive, but there is no import **, industry professionals believe that should import ** also enjoy tax benefits." The fertilizer industry association informed sources.

** is one of the main raw materials for chemical fertilizer production. China is a world's largest importer and imports more than 30 million tons a year.

Qu Xiangxiu, deputy secretary-general of the China Iron and Steel Association also attended the conference. "As early as two months ago, the relevant departments had already sought opinions on the adjustment of the taxation of the steel industry," she said. “Our proposal is to resume the export tax rebate policy that was abolished on July 15, 2010. In the current sluggish domestic market and weak demand, we can give the steel industry as much as possible some tax incentives.” .

On July 15, 2010, the Ministry of Finance and the State Administration of Taxation, pursuant to the "Notice on Cancellation of Partial Export Tax Rebates for Goods," explicitly revoked the export tax rebate for products containing 406 tariff lines including certain steel products and non-ferrous metal building materials. According to different products, the tax rebate adjustment policy cancels the tax rebate rate of 5% to 10%, involving 48 kinds of steel products such as the hot-rolled steel plate and medium-thick steel plate in the steel industry. Large steel companies with a large number of exports have been hit hard. About 40% of export steel products will be affected.

Qu Xiuli said: "The cancellation of this export tax rebate has a great impact on steel companies. We have been calling for and hope that the government can restore this policy."

Taking plate as an example, the export price of general plates is more than 600 US dollars per ton. According to the original export tax rebate policy, enterprises can get a few hundred dollars for each ton of export. This even caught up with the profit margins of some steel products.

There are also some tariffs related to long products, and the way the country imposes tariffs on exports. These products are treated as two high-quality products. Therefore, on the basis of the normal 17% tax, 5% to 10 are imposed. % of unequal tariffs. “Of course, this industry also hopes that it can properly reduce or eliminate tariffs to encourage excess production capacity in the country to be digested by the international market. However, this part of the tariff adjustment is unlikely to be large.” She said.

A person from the Ministry of Commerce said: "We have received preliminary proposals from the Ministry of Finance. We are also consulting with companies. We will agree with most of the reasonable opinions passed by companies, but there are some that may not involve two funds or one fund. Will pass."