Advertise with fastmoving.co.za
 
 

China VAT hike to hit SA consumers
China VAT hike to hit SA consumers

China VAT hike to hit SA consumers

FMCG SUPPLIER NEWS

Fin24 - Sep 30th, 15:54

Johannesburg - China's decision to place a 6% VAT charge on freight and related costs is going to have an impact on the importing price from China, warned Asgar Mahomed, managing director of ICT distributor, Esquire Technologies. 

Mahomed said the new Chinese policy means that all freight charges paid in China are to be subjected to the tax rise.

“In terms of the new tax law, the cost of the VAT is passed on to customers in China, which can recover it as an output tax refund. If the customer is located outside of China, it represents an additional cost," he said.

“What this means for the import industry is that we are going to see a 6% cost increase, which is going to have to be absorbed into the prices we offer our clients."

He said this is a surprise move by China and will have a ripple effect, as it will “be applicable to all logistic components payable in China”.

In his view it is important to understand that the new rule has been the subject of many discussions and that interpretation may or may not be fully comprehended at this point.

“In the past, freight forwarding firms in China were able to enjoy a 6% refund from the administration of taxation for transportation services, which in turn would allow them to reduce the amount of duties owed by them to the Chinese government," he said.

"However, with the new policy introduced on August 1 2013, forwarding firms in China will now be prohibited from being granted this refund. This new rule effectively means that the 6% VAT charge will now be assessed on all prepaid transportation services in China.”From Fin24.com 

Related News

China’s consumer inflation rises
21/10/2013 - 10:58
hina's consumer price index (CPI), a key measure of inflation, climbed to 3.1 percent year-on-year in September, the government has said.

Shoprite boss puts blame on manufacturing
16/10/2013 - 11:06
Shoprite chief executive Whitey Basson has moved beyond blaming the usual suspects of unions and labour legislation for South Africa’s economic woes and has lashed out at the “declining” manufacturing sector for its lack of innovation and competitiveness.

Asian bacteria threatens Florida oranges
14/10/2013 - 09:13
Washington - Citrus production in Florida, the world's second largest orange juice supplier after Brazil, is being threatened by a bacteria from Asia that has scientists racing for a remedy.

Distell taps into China's cognac market
09/10/2013 - 10:23
Johannesburg - South African liquor company Distell Group Limited [JSE:DST] has acquired a 60% share in fast-growing liquor distribution company CJ Wines & Spirits‚ expanding its presence in the East.

Namibia Breweries Limited earnings expected to be lower by N$190 million in September
03/10/2013 - 12:31
Namibia Breweries Limited (NBL) said earlier in September that it expects basic earnings per share to be materially lower than the prior year by between 66% and 68% in the year ended 30 June. The company said in a trading statement published by the Namibia Stock Exchange that the decline is attributed to the impairment of a deferred tax asset related to DHN Drinks.