A three-percentage-point cut to the rate of value-added tax (VAT) paid by Chinese manufacturers of metals and minerals will have little effect on export markets, traders have told Fastmarkets.
Market sources claim that the low levels of VAT exporters pay now will make the reduction more theoretical than actual.Chinese prime minister Li Keqiang announced the tax cut on March 5. The top rate of VAT, which is levied on manufacturers - including producers of industrial minerals - will fall by 3 points to 13%. The total value of these tax cuts is estimated at $90 billion per year. This follows a one-point cut to the top rate of VAT to 16% in May 2018.A portion of the VAT can be rebated for some exported goods, but there is no remittance on mineral exports. This...