China may soon announce a reduction in VAT on soybean meal exports

Introduction: it is said that the Ministry of Finance and the State Administration of taxation have opened up the green light to the policy of reducing export value-added tax in the near future, which is widely spread in the market, according to people familiar with the industry in Beijing Under the new tax policy, soybean meal exporters can get a full VAT rebate, which is now 13% Last week, soybean meal futures on the Dalian Commodity Exchange soared for two consecutive days on the back of market rumors that the Chinese government was considering reducing VAT on soybean meal exports Most industry analysts believe that reducing export VAT is part of the Chinese government's stimulus package for agricultural products Since the second half of 2001, the Chinese government has been discussing the issue of reducing the value-added tax on soybean meal export, trying to improve the production profits of domestic soybean crushing plants, which are struggling due to low profits and overstock of products Since 2001, domestic soybean industry organizations and mills have been actively trying to increase soybean meal exports, expecting potential tax cuts, although the Chinese government was silent on the issue at that time With China's accession to the WTO, China has promised to increase the import of edible oil in accordance with the tariff rate quota system On February 8, 2002, China's national development and Planning Commission issued an import quota for edible oil in 2002, including 2.4 million tons of palm oil, 2.518 million tons of soybean oil and 879000 tons of rapeseed oil The influx of cheap foreign edible oil will inevitably hit the domestic crushing plants with low profits and even losses, forcing them to look for more opportunities to export soybean meal for survival According to customs data, in January 2001, China exported 112768 tons of soybean meal, 82547 tons of which were exported to Japan and 3161 tons to South Korea VAT rebates reduce costs according to analysts in Beijing, with China's soybean meal exports likely to increase significantly in anticipation of new tax policies, and soybean processing plants in China's coastal areas will be the main beneficiaries Implementing such a tax rebate policy would reduce the cost of soybean meal exports by 150 to 200 yuan If the export price of soybean meal at the port, including VAT, is 1700 yuan per ton, the price per ton will be lower than 1504 yuan after receiving 13% VAT rebate, or 196 yuan per ton of soybean meal price will be reduced, said a trader in Beijing Analysts predict that once the VAT rebate policy is implemented, soybean meal exporters will benefit greatly, which will also promote soybean meal exports According to the latest forecast data of USDA world agricultural supply and demand report in February, China is expected to export 250000 tons of soybean meal in 2001 / 02 market year, 100000 tons higher than the forecast in January.