Tax rebate hike too low - China garment makers

13 June 2008 12:30  [Source: ICIS news]

SHANGHAI (ICIS news)--A proposed rebate increase on China's export tax on textiles and garments has not generated the expected level of excitement among the industry's large players, who believed that the hike was too minimal to significantly boost their earnings, a market watcher said on Friday.

The export tax rebates could be increased from the current 11% to 13% and 15% for textiles and garments respectively, said an official from the China Chamber of Commerce for Import & Export of Textiles.

"The government is mulling a policy overhaul of the export tax rebates hike, but no timeframe has been set for its implementation," the official added in Mandarin.

The official believed that the country's textile producers would benefit from the proposed hike.

Chinese textile producers were facing a margin squeeze currently with profit levels at a low 5%, she said, adding that the additional cost savings from the rebates would increase their bottom lines significantly.

"While any rebate in export taxes is good, this is a very low rebate hike for garment producers, and not very good," said a trader in Shaoxing, eastern Zhejiang province.

China had cut the export tax rebate for textiles and garments by two percentage points to 11% on 1 July 2007.

Hong Chou Hui contributed to this article
To discuss issues facing the chemical industry go to ICIS connect

By: Judith Wang
+65 6780 4359

< previous article(VIDEO – ICIS news Americas Lunchtime Bulletin 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly