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How much of the preferential policy for fertilizers remains?

2016-12-07View Original

Thread Content

In the past, China’s fertilizer industry enjoyed numerous preferential policies, mainly including discounts on electricity and gas prices, preferential railway freight rates, and exemption from value-added tax. In recent years, the marketization reform of fertilizers has accelerated significantly; starting in September last year, tax incentives for fertilizers were removed, and fertilizers, like other products, are now subject to value-added tax ; As of April 20 this year, all preferential electricity prices for fertilizers have been abolished ; Starting from November 10 this year, prices for gas used in fertilizer production will be fully liberalized, and the discounts on such gas use will be removed ; In fact, most of the preferential railway freight rates for fertilizers have been revoked; the rate has been changed from No. 2 to No. 4, but the exemption from the railway construction fund remains, which is currently the only preferential policy for fertilizers. Currently, the levy rate for railway construction funds ranges from 1.9 to 3.3 fen per ton-kilometer; if this preferential policy is also removed, the freight cost for transporting fertilizers by rail will increase by about 30 yuan per ton per thousand kilometers.   An industry cannot develop healthily if it relies constantly on preferential policies; therefore, from this perspective, the abolition of such preferential policies for fertilizers is actually a good thing. As the National Development and Reform Commission stated when discussing the positive aspects of allowing market-based pricing for gas used in fertilizer production, \"Market-based pricing for gas used in fertilizers will further enhance the market awareness of both suppliers and demanders, stimulate market vitality, and facilitate supply-side structural reforms in the fertilizer industry through market-based mechanisms.\" ”   Furthermore, the removal of these preferential policies paved the way for lower tariffs on fertilizers. One of the reasons for imposing high tariffs on fertilizer exports in the past was the existence of such preferential treatments, which were intended for domestic farmers rather than those abroad; it is not right to use domestic subsidies to benefit foreign countries. If fertilizers are to be exported, then these preferential treatments must be removed, which is why the export tariffs on fertilizers are high. Now that the preferential policies for fertilizers have been largely abolished, there is no longer any issue of subsidizing foreign countries from within the country; therefore, it is highly likely that export tariffs on fertilizers will be reduced next year.
Reply #22016-12-16
All collected! No more discounts! ! ! However, VAT invoices can be used for offset, so it’s still possible to save a bit! ! ! ! ! ! !
Reply #32016-12-21
If one relies on crutches to walk all the time, they will never be able to walk normally. Only through marketization and fair competition can the industry develop healthily.

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