Chinese School - Tax rebates adjustment affects listed firms

BIZCHINA / Impacts

Tax rebates adjustment affects listed firms

By Du Xiaoli (chinadaily.com.cn)
Updated: 2007-06-22 18:15

Many listed companies recently announced that their profits will shrink
following a notice on lowering tax rebates for some export goods jointly
issued by the Ministry of Finance and State Administration of Taxation,
according to Shanghai Securities News.

On June 22, four listed companies declared that the policy adjustment
will have negative effect on their performance. Qingdao Doublestar Co Ltd
said that export tax rebate for tires �C its main product �C will be
slashed to 5 percent from 13 percent, effective from July 1. The export
tax rebate adjustment will increase production costs by around 15 million
yuan this year calculated based on the company's tire exports of 1
billion yuan in 2006.

However, Qingdao Doublestar said the impact will only slightly affect the
company and the firm will do its best to minimize the negative effect
through product price adjustment and product structure innovation.

Zhejiang Jingxin Pharmaceutical Co Ltd said export tax rebates for its
product, an active pharmaceutical ingredient (API) for quinolones, was
cut to 5 percent from 13 percent. The company��s export sales revenue of
API for quinolones was 112.50 million yuan in 2006, accounting for 26.23
percent of its total sales revenue last year. The policy adjustment will
greatly impact the company's performance in 2007 and in the following
years.

Nantong Jiangshan Agrochemical & Chemicals Co Ltd said the company's 2007
profits will decrease by around 27 million yuan due to lower export tax
rebates, rising pollution discharge fees and increasing land tenure tax.

Meanwhile, the export tax rebates will impact net profits at China
Fiberglass Co Ltd as its fiberglass product is cut to 5 percent from 13
percent. The reduced profits will account for 26.39 percent of the
company's total profits in 2006, according to a calculation based on
profits in 2006.

(For more biz stories, please visit Industry Updates)

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