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	CIRCULAR OF THE STATE COUNCIL ON IMPROVING THE STATE AND LOCAL EXPORT TAX REFUND BEARING MECHANISM

	(No.25 [2005] of the State Council, August 1, 2005)


SUBJECT : TAX REFUND; THE STATE AND LOCAL EXPORT TAX REFUND BEARING MECHANISM; IMPROVEMENT
ISSUING DEPARTMENT : THE STATE COUNCIL OF THE PEOPLE'S REPUBLIC OF CHINA
ISSUE DATE : 08/01/2005
IMPLEMENT DATE : 01/01/2005
LENGTH : 478 words
TEXT :

The reform of the export tax refund mechanism is a significant decision as made by the CPC Central Committee and the State Council to promote the system reform of foreign trade and maintain a sustainable and sound development of foreign trade and economy. The reform of the export tax refund mechanism has been carried out smoothly on the whole for more than one year, in which the anticipatory targets have been basically realized, any export tax refund that has been defaulted in payment accumulatively for the past years has been paid off, an export tax refund bearing mechanism as jointly shared by the state treasury and all the regions has been established, the enthusiasm of enterprises for export has been mobilized, the structure of exported goods has been optimized and the export of foreign trade has been promoted to grow in a rapid manner. However, there arise some new situations and problems in the operation of the new mechanism, which are mainly embodied in unbalanced local bearing, namely, the comparatively heavy bearing in some regions, some region even restricts the export of outsourced products and restricts the introduction of any foreign-funded project for export, etc.. Therefore, the State Council has, on the precondition of upholding the principle that the export tax refund is jointly borne by the state treasury and all regions, decided to improve the present mechanism, which shall be implemented as of January 1, 2005. We hereby notify the relevant issues as follows:

1. Adjusting the sharing proportion of export tax refund by the state treasury and all regions. The base of export tax refund of all regions as verified and approved by the State Council remains the same and the part that exceeds the base shall be jointly borne by the state treasury and the relevant region in light of a proportion of 92.5:7.5.

2. Regulating the sharing measures for export tax refund by regions: All provinces (regions, municipalities) shall, according to the actual situations, formulate the sharing measures for export tax refund by themselves but shall not disintegrate the bearing of export tax refund to any village or town or enterprise; such measures as restriction of the export of outsourced products that may obstruct the normal development of foreign trade shall not be adopted. Such problems as unbalanced bearing of export tax refund by any subordinated city or county shall be resolved by the public finance at the provincial level in an overall manner.

3. Improving the methods of export tax refund and withdrawal from the state treasury. The export tax refund shall be put in the charge of the state treasury and uniformly returned from it, and the return of export tax refund base to regions by the state treasury shall be abolished. The part as borne by regions may be turned in by a special program at the end of the year.