ANNOUNCEMENT 25 Mar 2011In March 2011, the government of China announced a change in export taxation.
NUMBER OF INTERVENTIONS
Chinese Version: http://news.xinhuanet.com/fortune/2011-03/26/c_121233997.htm
On 25 March 2011, the Chinese Ministry of Finance (MOF) and the Chinese State Administration of Taxation (SAT) jointly announce a circular to imposed an adjusted Rare Earth Tax from 1 April 2011.
In accordance with this Circular, the tax rate of mined light rare earths will become RMB 60 yuan ($9.1) per ton, while that of medium and heavy rare earths is RMB 30 yuan ($4.5) per ton. Before this Circular adopted, the taxes of rare earth minerals were levied under the category of ordinary non-ferrous metals ores, with tax rates between 0.5 and 3 yuan ($0.07 and $0.4) per ton cubic meter.
The increase in the adjusted rare earth tax will lead to heavier duties on rare earth producers, both Chinese and foreign, as well as for buyers. It is expected that rare earth prices on world markets may rise again. Should the application of this measure be asymmetric, in particular if local governments taxChinese firms operating in their jurisdiction less, then there is the potential for this measure to be discriminatory.