Frozen avocado, non-frozen orange juice, medicine for treating asthma.
From next year, the import tariffs on these goods will be lowered.
With the approval of the State Council, the State Council Customs Tariff Commission recently issued a notice to adjust the import tariffs of some commodities from January 1, 2020. Which goods’ tariffs have dropped significantly this time? What benefits will this adjustment bring to the people and enterprises? In this regard, the reporter interviewed relevant experts.
Adjusting tariffs in various ways to promote high-quality economic development
The tariff adjustment plan has made great efforts to adjust the tax rate, including MFN tax rate, agreed tax rate, preferential tax rate, provisional tax rate and other adjustments, and many commodity tariffs have been reduced to varying degrees. Experts believe that the balance of import and export structure is an important part of high-quality economic development. Under the situation that China’s export scale has already led the world, improving the scale and quality of imports has become the next step. This tariff adjustment plan will help to improve the domestic consumption structure, reduce the cost of enterprises, and also help to improve China’s opening up level and continuously expand new space for trade development.
According to the plan, first, in terms of MFN tariff rate, China will implement the fifth step of reducing the MFN tariff rate of some information technology products from July 1, 2020 according to the negotiation results of expanding the product range of information technology agreements under the WTO framework.
Second, in terms of provisional tax rate, from January 1, 2020, the provisional import tax rate of 859 commodities will be lower than the most-favored-nation tax rate, an increase of more than 20% compared with the same period last year.
Third, China will continue to implement the agreed tax rate on some commodities originating in 23 countries or regions in 2020. At the same time, we will continue to implement preferential tax rates for the least developed countries that have established diplomatic relations with China and completed the exchange of letters, and adjust the preferential tax rates to apply to countries according to the United Nations list of least developed countries and China’s transitional arrangements.
The provisional tax rate for 859 commodities will better meet people’s living needs.
In this tentative import tax rate adjustment scheme, many commodities are closely related to people’s daily life. Among the 859 commodities that will be subject to the provisional import tax rate, a number of domestic consumer goods with relative shortage or foreign characteristics have been imported, including frozen pork, frozen avocados and non-frozen orange juice, so as to better meet people’s living needs.
If the import tariff rate of frozen pork, which has attracted much attention, is reduced from 12% to 8%, it is mainly considered that appropriately increasing pork imports can effectively alleviate the domestic supply and demand pressure; At the same time, we will continue to implement zero tariffs on miscellaneous meals used for pig feed for 10 tax purposes to help domestic pigs resume production.
The plan has reduced the import tariffs on some fruits and juices, increased the import of many foreign specialty products, and made people’s "vegetable baskets" and "fruit baskets" more diverse. For example, pecan fruit decreased from 24% to 7%, fresh or dried avocado decreased from 25% to 7%, frozen avocado decreased from 30% to 7%, and non-frozen orange juice decreased from 30% to 15%, all of which were greatly reduced.
In order to reduce the drug cost and promote the production of new drugs, the plan implements zero tariff on alkaloid drugs used to treat asthma and raw materials for producing new diabetes drugs to better meet people’s medical and health needs.
Fan Yong, a professor at the School of Finance and Taxation of the Central University of Finance and Economics, pointed out that these adjustment projects have fully targeted the gap between supply and demand in the domestic market and are of great significance for improving people’s livelihood. If the domestic pork price increase is due to the shortage of supply due to the epidemic situation, tariff measures can supplement the supply and stabilize the market price; Due to the improvement of people’s living standards, the demand for some fruits with less domestic output has increased, and increasing imports appropriately can better meet the demand; Asthma, diabetes and other diseases are also quite common in China, and tariff adjustment can further reduce the cost of medication and bring benefits to patients.
Tax reduction of 176 information technology products to help enterprises transform and upgrade.
In order to better promote the development of manufacturing enterprises, the import tariffs of advanced technologies, equipment and parts have been adjusted, including adding or reducing the provisional import tariffs for semiconductor testing sorting and braiding machines, high-pressure turbine clearance control valves, hydraulic torque converters and aluminum valve cores for automatic transmissions, ferroniobium, multi-element integrated circuit memories, culture media and other commodities.
Fan Yong said that we can see that most of these raw materials and spare parts are distributed in high-tech industries such as automobiles, communications, integrated circuits, biology, etc. Reducing tariffs through a tentative tax rate can promote enterprise innovation, transformation and upgrading, and further support the development of China’s manufacturing industry and high-tech industries.
According to the plan, starting from July 1, 2020, the provisional tax rates for the import of seven information technology products will be cancelled; At the same time, according to the agreement reached by 24 WTO members, including China, the United States, Europe, Japan and South Korea, on expanding the product range of the Information Technology Agreement in December 2015, China has implemented four-step tax reduction for the products expanded by the Information Technology Agreement. This time, China will implement the fifth-step tax reduction on the MFN rate of 176 information technology products on this basis.
Gao Lingyun, a researcher at the Institute of World Economics and Politics of China Academy of Social Sciences, pointed out that China’s import and export scale of information technology products accounts for a quarter of the world’s total, and it is the world’s largest import and export country of information technology products. Reducing tariffs on information technology products can greatly reduce production costs and improve competitiveness for these enterprises that need to import information technology products. Globally, jointly reducing tariffs on information technology products can not only promote the faster development of information technology, but also be more conducive to world trade and investment and global economic growth.
Reduce the agreed tax rate of some countries and speed up the construction of free trade zone network
According to the free trade agreement or preferential trade arrangement signed between China and relevant countries or regions, China will continue to implement the agreed tax rate on some commodities originating in 23 countries or regions in 2020. Among them, the free trade agreements between China and New Zealand, Peru, Costa Rica, Switzerland, Iceland, Singapore, Australia, South Korea, Georgia, Chile and Pakistan and the Asia-Pacific Trade Agreement have been further reduced. In addition, except Equatorial Guinea, the preferential tax rate will continue to be applied to other least developed countries that have established diplomatic relations with China and completed the exchange of letters.
It can be seen that a considerable number of these 23 countries or regions are along the Belt and Road, and reducing tariffs in the form of agreed tax rates will help China and countries and regions along the Belt and Road to strengthen economic and trade cooperation, which is of great significance for promoting the high-quality development of the Belt and Road, building a high-standard free trade zone network facing the world, and implementing a mutually beneficial and win-win opening strategy.
Qiao Baoyun, Dean of China Institute of Public Finance and Policy of Central University of Finance and Economics, pointed out that these measures reflect China’s efforts in promoting global economic integration and multilateral economic and trade cooperation, which are conducive to reducing import costs, promoting the orderly and free flow of international and domestic factors, and promoting the construction of a new open economic system with a higher level, which can not only promote the improvement of China’s foreign trade structure, but also help China to win-win cooperation with other countries and regions and share development achievements.(Reporter Lu Yuanzhen)
