China: leather tax changes clarified
02/04/2009
The secretary general of the China Leather Industries Association, Mr Su Chaoying, has confirmed that a change has taken place in the tax regime surrounding the leather industry in China.
With effect from April 1, the government there has lowered the import duty and value added tax on wet blue, crust and finished leather to 0%. The import duty for raw hides remains at 9%, with value added tax for this material remaining at 17%.
In addition, exporters of some finished leathergoods—including handbags, belts and garments (although not footwear)—will be able to claim a 15% tax rebate on shopping their products abroad.
Commentaotrs reacted by saying that many Chinese tanners would probably still prefer to import raw hides (often from the US). However, many recognised that this move will, at least, make it much less expensive for Chinese tanners to turn to alternative sources for hides, such as Brazil.
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