China Drops Export Tax on Aluminum and Rare Earth Metals
April 24, 2015 Taxation in China
BEIJING – The international market for metals could undergo a significant adjustment, as China drops a 15 percent export tax on a number of metals.
On April 25th the government of China announced that the export tax on aluminum, rare earth metals, and selected other metals, such as tungsten and molybdenum.
The export taxes, which are set at 15 percent, were originally enacted to protect the supply of the metals in China, while simultaneously helping foster the mining industry and any other industry using the metals as raw materials.
The removal of the tax is part of a wider set of measures to streamline the taxation system in China and to reduce the red tape faced by businesses.
Soon after the announcement the benchmark for aluminum prices on the London Metal Exchange fell by 1.4 percent.
Some experts have already predicted that the reduction of the tax will lead to some political friction as China’s metal extraction industry, which is sometimes considered to be overdeveloped, will flood the international market reducing prices while putting extra pressure on other international suppliers.
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