Laws of the People's Republic of China

Notice of the State Council on Improving the Bearing Mechanism of Central and Local Export Tax Refund

No.25 [2005] of the State Council

The people's governments of all provinces, autonomous regions and municipalities directly under the state treasury, all ministries and commissions of the State Council and the institutions directly under the State Council:

The reform of the export tax refund mechanism is a significant decision made by the Central Committee of the Communist Party of China and the State Council to promote the system reform of foreign trade and maintain a sustainable and sound development of foreign trade and economy. For more than one year, the reform of the export tax refund mechanism has been getting along smoothly on the whole, under which the planning targets have been basically realized, export tax refunds that have been defaulted in payment accumulatively for the past years have been paid off, an export tax refund bearing mechanism as jointly shared by the central and all the localities has been set up, the positivity of enterprises for export has been mobilized, the structure of exported goods has been optimized and the export of foreign trade has been rapidly increased . However, there are still some new situations and problems during the operation of the new mechanism, which are mainly embodied in unbalanced local bearing, namely, the bearing in some regions is comparatively heavy, some region even restricts the export of outsourced products and restricts the introduction of foreign-funded projects for export and etc. Therefore, the State Council has, on the precondition of insisting on the principle that the export tax refund is jointly borne by the central and all localities, decided to improve the present mechanism, which shall go into effect as of January 1, 2005. We hereby make the notice on the relevant issues as follows:

1.

Adjusting the proportion of export tax refunds borne by the central and all localities. The base of export tax refunds of all localities as examined and approved by the State Council remains the same, and the part that exceeds the base shall be jointly borne by the central and the relevant localities in light of the proportion of 92.5:7.5.

2.

Regulating the bearing measures for export tax refunds by localities. All provinces (regions, municipalities) shall, in light of the actual situations, formulate the sharing measures for export tax refunds by themselves, but shall not disintegrate the bearing of export tax refunds to any village or town or enterprise; measures that may obstruct the normal development of foreign trade, such as restricting the export of outsourced products, is forbidden. . Problems such as unbalanced bearing of export tax refunds 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 refunds and the withdrawal from the state treasury. The export tax refunds 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 cancelled. The part borne by localities may be turned over by special item at the end of each year.

The State Council of People's Republic of China

August 1, 2005