Call Your Accountant� VAT Rebate is Going Away!!

China tax

For those of you who were readers of All Roads earlier in the year, you will know that I beat the majority of news services to the punch when reporting the reduction of the VAT rebate for 3000 goods.

Well… if our sources are correct (same sources as last time), then we are about to see the end of the VAT rebate system for all or part of the goods still enjoying these rebates.

Now, I am not suggesting anyone start ramping up production, but I am suggesting that readers begin factoring in the fact that VAT is going away. It may not be tomorrow, it may not be at the end of the year (current rumor), it may not be next summer (my original expectation), but it is going to happen…. and when it does, it may sting exporters for anywhere between 5 and 13%.

Spend some time and figure out the impact. If you are in a strong market position, are already in China, are exporting, and believe your customers do not have any alternative then to buy your products… go ahead and increase your prices accordingly.

Otherwise, it is time to get your sales and operations team into the same conference room to find ways to save money (no.. that does not mean you can switch out water based paint for lead) and understand what options exist on the pricing side as well.

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