| Rebate rise a boost for IT industry |
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| Thursday,December 30,2004 Posted: 13:04 BJT(0504 GMT) |
By Updated: 2004-12-30 09:18
Raising tax rebates on telecom-related equipment exports will help the telecoms industry strengthen its competitiveness in the overseas market, analysts said.
The Ministry of Finance and the State Administration of Taxation announced on Monday that the government will raise tax rebates on 14 categories of IT products from the current 13 per cent to 17 per cent.
The categories include integrated circuits, telecoms equipment accessories, Routers, LCDs (Liquid Crystal Displays), wireless handsets and mobile telecommunications base stations.
The new regulation took effect on November 1.
Exporters can receive the tax rebate based on their customs declaration.
"This is a good news for us, as it will help us lower our costs and increase our profits in the international market," said Fu Jun, spokesperson of Huawei Technology.
The government slashed tax rebates on IT products to 13 per cent beginning January 1 this year.
Nevertheless, telecoms related manufacturers such as Huawei Technology, ZTE, Bird and TCL are striving to expand into the international market by leaps and bounds.
Figures from the General Administration of Customs show a total of more than 4 million domestic handsets were exported in the first three quarters of this year. The figure was double last year's total.
Huawei Technology, for example, is expected to reap overseas sales of US$2 billion this year.
Fu said the company will adjust their business strategies to better tap demand in the overseas market. "But the adjustment will be slight," he said.
Analysts believe the raising of tax rebates will also help international telecoms equipment-related companies in China become more competitive in the international market by saving costs.
It will prove helpful to form a complete telecoms industrial chain in China by luring more telecoms equipment-related suppliers to the Chinese market, analysts said.
"Motorola will make adjustments accordingly to better tap the market," said Lily Guan, an official with Motorola (China) Electronics Ltd's Personal Communications Sector.
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