Tax cuts proposed for China’s iron ore miners
China’s iron ore miners should be given tax cuts to boost production, as only increased domestic availability can change the supply-demand imbalance.
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Cutting miners’ tax burden is “a must”, Xie Sanming, who is from the bureau of operation monitoring and coordination of the Ministry of Industry and Information Technology (MIIT), said at an iron ore conference in Hangzhou on Friday November 16.
Iron ore, the price of which is driven by increased demand and high logistic costs, is not a strategic resource for China. The country has abundant reserves, which could well support accelerated development boosted by tax incentives, Xie pointed out.
“MIIT is studying possible tax cuts of 10-15%,” China Iron & Steel Assn deputy secretary-general Wang Xiaoqi said.
“Current taxes increased after Beijing raised value-added tax on domestic mines in 2009 from 13% to 17%, and changed the resources tax from 60% of the base tax to 80% of the base tax,” Xie said.
The total tariffs on domestic iron ore producers, which are price based, stood at 26.23% during the first half of 2012, up from the 21.67% in 2009, according to Xie.