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China reduces value added tax on imported wool



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Media Release John Anderson 2ES£l 5E5, CHINA REDUCES VALUE ADDED TAX ON IMPORTED WOOL

DPIE98/57A 5th May 1998

Federal Primary Industries and Energy Minister John Anderson today welcomed official confirmation that China has reduced the value added tax (VAT) applying to imported greasy wool from 17 to 13 per cent.

Mr Anderson said that China has also increased its VAT rebate on textile exports from 9 to 11 per cent.

" The reduced VAT on greasy wool should provide a welcome boost to Australia's efforts to increase wool's share of the Chinese apparel market," he said.

" Wool has come under increasing pressure from alternative fibres, particularly synthetics. The reduction in VAT effectively brings imported greasy wool into line with locally grown wool and improves wool's competitive position with other fibres in what is a highly competitive fibre market.

" The reduction in VAT on greasy wool coupled with the increase in the VAT rebate on textile exports was expected to reduce the cost of manufacturing wool textiles in China by up to A$120 million a year.

" Much of this benefit will ultimately flow back to Australian wool growers through increased demand generated by a more competitive Chinese wool textiles industry.

" These gains come on the back of other positive developments in China, including reduced duties for raw wool and 'top' of 1 per cent and 3 per cent respectively, down from highs in 1993 of 15 and 20 per cent.

" These reductions in trade barriers demonstrate the benefits to farmers of the Government pursing open market policies through bilateral trade negotiations."

Mr Anderson said he was looking forward to substantial progress being made in the next round of negotiations in July on developing a model wool contract. He said he was also pleased to see an increased level of industry cooperation this year and that he looked forward to the forthcoming visit by the Chairman of the China National

Textiles Council.

Media inquiries: Mr Anderson's office Robert Haynes (02) 6277 7520/0419 493 511 DPIE Tricia Wheatstone 02) 6272 4229

Internet: h ttp ://www.dpie.gov.au/dpie/pr/media_releases/ anderson/ index.html

Parliament House. Canberra ACT 2600 Tel: (06) 277 7520 Fax: (06) 273 4120