5 Aug 2016
Guangxi Promotes Innovative Development of Processing Trade
Guangxi’s recent release of the Implementation Opinions on Promoting the Innovative Development of Processing Trade marked the commencement of round two of its processing trade maximisation plan. The new policy aims to give policy support to enterprises in areas such as taxation, endowment insurance, collection of water conservancy contributions, land use and funding support for qualified projects.
The following are some of the new measures proposed by the Opinions for the innovative development of processing trade:
1. Processing trade enterprises whose projects fall under the scope of the Catalogue of Encouraged Industries in the Western Region with total investment exceeding RMB50 million will be eligible for enterprise income tax at a reduced rate of 15% and exempt from contribution to the local coffers up to 31 December 2020. This means an actual tax burden of only 9%.
2. Basic endowment insurance premium rate will be reduced from 20% to 14% for enterprises in the 36 key industrial parks.
3. The collection of contributions to the water conservancy fund will be temporarily suspended for processing trade enterprises in the 36 key industrial parks.
4. For priority development industries with intensive use of land determined by the autonomous region, the minimum land assignment price may be set at no less than 70% of the relevant standards. For industrial projects using state-owned idle land specified in the overall land use plan for urban construction, the minimum land assignment price may be set at no less than 50% of the relevant standards.
5. More financial support will be given to processing trade transfer projects. In 2016, a total of over RMB600 million, including RMB300 million from the Guangxi government as well as funds for foreign trade and economic development from the central government, have been allocated for the further improvement of the processing trade development environment. Greater support will be given to industrial transfers, improvement of logistics and improvement of labour utilisation.
Guangxi saw its import and export volume in processing trade hitting US$10.57 billion in 2015, representing a year-on-year increase of 26.1%, the fourth fastest in the whole country and attaining the target for round one of the “processing trade maximisation plan” a year ahead of schedule.