Textile enterprises face difficulties in increasing tax rebate rates and need preferential interest loans

Textile enterprises face difficulties in increasing tax rebate rates and need preferential interest loans

Textile enterprises face difficulties in increasing tax rebate rates and need preferential interest loans
The Ministry of Finance and the State Administration of Taxation decided yesterday to increase the export tax refund rate for some textiles and clothing from 11% to 13%, and the export tax refund rate for some bamboo products to 11%. The new tax refund rate will be implemented from today. Experts believe that increasing the tax rebate rate is a great benefit to export-oriented enterprises, but it is still difficult to reverse the trend of slowdown in exports and declining profits in the entire textile industry.
Tax rate adjustment helps enterprises reduce costs
“Increasing the export tax rebate rate can alleviate the pressure on enterprises due to rising costs, especially when the economy is facing recession and international market demand has declined, which has a considerable impact on the export of the textile industry.” said Sun Huaibin, director of the China Textile Economic Research Center.
Since the beginning of this year, the export situation of my country’s textile and apparel enterprises has been grim. In the first five months, the cumulative growth rate of textile exports was 15.5%, down 1.4 percentage points from the same period last year. The cumulative growth rate of the total export value of clothing enterprises was 9.2%, down nearly 10% from the same period last year. percentage points. In the first half of the year, many textile companies in Guangdong and other places went bankrupt or suffered losses.
The increase in the export tax rebate rate has provided a breathing space for a large number of export-oriented companies on the verge of bankruptcy. Wang Rong, a textile industry analyst at United Securities, said that changes in tax rebate rates have varying impacts on listed companies, with companies with a large export sales ratio having a greater positive impact. On the premise that the product sales price remains unchanged, if the tax rebate rate is increased by 1%, it means that the company’s gross profit margin increases by 1%.
The slowdown in export growth is difficult to reverse
Although the increase in the tax rebate rate is good for textile and apparel companies, analysts believe that the slowdown in textile and apparel export growth in the second half of this year will be difficult to reverse. Wang Rong said that the 2 percentage point increase in the export tax rebate rate will only help general trade export companies extend the transition period. The trend of slowing export growth is difficult to reverse because the root cause of the slowdown or decline in export growth still exists, that is, costs. The pressure is still increasing, and the pace of RMB appreciation has not slowed down.
Zhang Bin, a textile industry researcher at Sinolink Securities, also pointed out that the decline in textile product export growth this year is mainly due to the economic downturn in Europe and the United States, accelerated appreciation, and rising raw material labor production costs. The export tax rebate rate is not one of the main factors affecting exports. Although the increase in the tax rebate rate will stimulate exports to a certain extent, it will have a limited effect on corporate profits and export growth. And if the tax rebate rate is raised, foreign investors will inevitably lower their product quotations accordingly. Overall, the income of my country’s textile enterprises will be less than that of foreign investors.
Many analysts, including Zhang Bin, believe that the current operating difficulties of textile companies are due to the high homogeneity of my country’s textile companies, serious oversupply of production capacity, and very disordered market competition. After more than 20 years of rapid development, the industry is in urgent need of integration. The current temporary difficulties in the market have provided a rare opportunity. The increase in the tax rebate rate has interfered with the normal progress of market adjustment to some extent.
Similar fine-tuning measures may be expected in the future
It is worth noting that the callback measures for export tax rebates for textiles and clothing were released after high-level government officials conducted intensive research and set the tone for the next stage of macro-control.
Zhang Bin pointed out that after the central government set the macroeconomic development strategy for the second half of the year, the finance and taxation departments took the lead in adjusting the export tax rebate policy, indicating that the “stable foreign trade development” in the 6-point opinion of the State Council Economic Work Conference at the beginning of this week is being implemented. This means that management has begun to take concrete actions for future economic development.
Some people in the market believe that the adjustment in the export tax rebate rate is just the beginning, and similar fine-tuning measures are likely to continue to be introduced in the future. “For the vast majority of textile companies, what they need is not an increase in export tax rebates, but loans with preferential interest rates.” CA82LWN8b6

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