Chinese Premier Wen
Jiabao Friday urged all localities across the country to work
to facilitate reform on the export tax rebate system which may have
an impact on the benefits of local governments.
Wen said at a meeting on the reform that with the rapid growth
of China's exports, the problem that the share of tax fails to be
refunded to enterprises has become increasingly prominent. This has
affected the normal operation of export-oriented enterprises,
especially those engaged in export business.
The premier attributed the failure to the unreasonable export
tax rebate mechanism, saying it failed to meet the needs for
industrial restructuring and the volume of the rebates has grown
far beyond the capacity of the central finance. As a result, "the
more rapid exports grow, the heavier the financial burden the
central finance faces," Wen said.
To reform the current export tax rebate system, he said, efforts
should be intensified to deepen the reform of the financial and
foreign trade systems, which will help improve enterprises'
competitive edge, export product mix and the efficiency of export
business, alleviate the government's financial burden, promote
exports and enhance management of tax refunding.
China has accumulated sufficient foreign exchange reserves
thanks to years of fast growth in economic development and exports
as well, which creates a good condition for the reform, Wen said,
stressing, "we must lose no time to promote the reform."
According to Wen, plans have been drawn out for the reform after
mass investigations. The major reform measures cover readjustment
of the export tax rebate rates, with the increased share of rebated
tax paid by both the central and local fiscal departments.
As an import part of the reform, the value-added tax on imports
and income of consumption tax will be first used for tax rebate,
and the arrears of what should be refunded to export enterprises
will be paid by the central finance, Wen said.
(Xinhua News Agency October 11, 2003)