Tax rebates adjustment affects listed firms
By Du Xiaoli (chinadaily.com.cn)Updated: 2007-06-25 09:55
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 the 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 – its main product – 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 (US$1.97 million) this year calculated based on the company's tire exports of 1 billion yuan in 2006.
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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.
For Nantong Jiangshan Agrochemical & Chemicals Co Ltd, the company says its 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 was 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.
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