On June 18, the State Administration of Taxation issued the “Circular on Explaining the Applicable Tax Rate of Sulphurâ€. The new applicable tax rate for sulphur is 13% for sulfur from natural sulphur mining and 17% for sulphur produced from processing. Natural sulphur refers to the sulphur extracted from natural sulphur mines and belongs to the non-metallic ore mining and mining products specified in the Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting the Value-added Tax Rate for Mining and Non-metallic Minerals Mining Products. The sulphur produced by the processing refers to the production from natural gas, crude oil and other sulfur-containing materials through desulphurization and other processes, and does not belong to non-metallic mineral mining and selection products. The "Notice" also clearly stated that given that China's imported and self-produced sulfur are processed, the sulfur tax rate is 17%. It is understood that the previously implemented tax rate was 13%.
After the introduction of this policy, it has caused strong reactions from the industry. The industry analysts recently agreed that in the current situation, increasing the sulfur VAT rate is not conducive to the development of the industry and launching the energy conservation and emission reduction actions the country is advocating. They called on the relevant state departments to proceed from reality and reduce the sulfur VAT.
First, the increase in sulphur VAT will again increase the production costs of phosphate compound fertilizers and sulfuric acid industries. Wu Xiyan, chairman of the China Phosphate Fertilizer Industry Association, said that the price of imported sulphur has soared this year, which has seriously affected China's fertilizer production. Due to changes in international supply and demand and transportation and other reasons, the price of sulphur continued to rise. At present, the CIF price has risen from US$79/ton at the beginning of the year to more than US$180/ton, and it has also shown an upward trend. According to the import of 5 million tons of sulphur from June to December, the import cost will increase by nearly 4 billion yuan. The price of commercial sulfuric acid also increased from 200 to 300 yuan/ton in the same period of last year to 500 to 600 yuan/ton in the current period, resulting in the production of fertilizers mainly made of sulphur-based sulphuric acid in provinces such as Fujian and Jiangxi, which account for 1/3 of the total output of phosphate compound fertilizers. The production costs of diammonium phosphate and monoammonium phosphate have risen by more than 400 yuan per ton. Most of the enterprises are on the verge of losing money. At present, there are companies that cut their production or stop production due to the high price of sulfuric acid. The phosphorus and compound fertilizer and sulfuric acid industries are in a very difficult position. The implementation of the “notice†issued by the General Administration of Taxation will increase the production cost of sulfuric acid by RMB 20 per ton, and the cost per ton of monoammonium phosphate and diammonium phosphate will increase by nearly RMB 30. This is undoubtedly worse for the phosphate fertilizer and sulfuric acid industries.
In this regard, Yang Caibin, vice president of Hubei Yangfeng Co., Ltd., also held the same attitude: “This year, all the raw materials of compound fertilizer such as monoammonium phosphate, potassium chloride, sulfur, and ammonia prices have all substantially increased, making the cost of compound fertilizer significantly higher. However, the market price is 'unchanged.' The country's increase in the import of sulfur VAT rate has virtually increased the company's production costs. This is undoubtedly an additional burden for the phosphate and compound fertilizer industries where raw material prices have risen this year."
Secondly, increasing the sulfur VAT rate is not conducive to reducing the trade surplus. Wu Xiyan further analyzed that “China’s sulphur resources are in short supply and the import dependency has exceeded 50%. In 2006, China imported 8.18 million tons of sulphur, which accounted for 31.8% of the world’s trade volume. The introduction of this policy will reduce the profitability of some enterprises. The reduction of imports will lead to a larger trade surplus.†Ya-Jie Ye, Marketing Manager of Yuntianhua International Chemicals Co., Ltd. also analyzed: “The relevant policies introduced by the state earlier canceled the export tax rebate for 2,831 products, aiming to narrow the trade surplus. And for sulphur, a product that needs to be imported in large quantities to raise the value-added tax, it will undoubtedly restrict the import of the company and it will not help narrow the trade surplus."
Thirdly, it restricted the import of energy and resources. Wu Xiyan said: "Imported sulfur is an imported resource, but also imported energy. According to incomplete statistics, in 2006, about 27 million tons of steam by-product of sulfuric acid production could replace 3.7 million tons of standard coal. These steam parts are used for power generation, and some of them are used. In chemical fertilizer or other production, the domestic annual production capacity of 1 million tons of sulfuric acid plant reaches 53,000 kWh, and the cost of power generation is only around 0.1 yuan/kWh, which is lower than other energy sources.At present, in the coastal energy shortage areas, The large-scale sulphuric acid plant is built as an energy plant and at the same time it can reduce CO2 emissions. Therefore, sulphur is imported as a dual resource of energy and energy, and is safe, environmentally friendly and conducive to the healthy development of the national economy."
Fourth, it is not conducive to energy-saving emission reduction and the development of circular economy. Yang Caibin said: “The 17% value-added tax is also levied on the processing of sulfur, which will crack down on the enthusiasm of enterprises to recover sulfur, and is not conducive to the current promotion of energy-saving and emission reduction.†Wu Xiyan also pointed out: “Sulfur is a by-product of natural gas, refining and purification processes, and sulfur. The higher the recovery rate, the lower the emission of SO2 during the use of various types of oil products and natural gas, which is conducive to reducing pollution and protecting the environment and is in line with the concept of developing a recycling economy. Therefore, the state should encourage enterprises to recover sulfur from the perspective of reducing the value-added tax rate."
In view of the above reasons, the China Phosphate Fertilizer Industry Association and related companies called on the government to encourage and encourage the import of sulphur and domestic natural gas, and refinery recovery of sulphur, to reduce or exempt the value-added tax, to really support the production of chemical fertilizer companies, and to promote domestic enterprises to do a good job of energy-saving emission reduction The development of circular economy.
After the introduction of this policy, it has caused strong reactions from the industry. The industry analysts recently agreed that in the current situation, increasing the sulfur VAT rate is not conducive to the development of the industry and launching the energy conservation and emission reduction actions the country is advocating. They called on the relevant state departments to proceed from reality and reduce the sulfur VAT.
First, the increase in sulphur VAT will again increase the production costs of phosphate compound fertilizers and sulfuric acid industries. Wu Xiyan, chairman of the China Phosphate Fertilizer Industry Association, said that the price of imported sulphur has soared this year, which has seriously affected China's fertilizer production. Due to changes in international supply and demand and transportation and other reasons, the price of sulphur continued to rise. At present, the CIF price has risen from US$79/ton at the beginning of the year to more than US$180/ton, and it has also shown an upward trend. According to the import of 5 million tons of sulphur from June to December, the import cost will increase by nearly 4 billion yuan. The price of commercial sulfuric acid also increased from 200 to 300 yuan/ton in the same period of last year to 500 to 600 yuan/ton in the current period, resulting in the production of fertilizers mainly made of sulphur-based sulphuric acid in provinces such as Fujian and Jiangxi, which account for 1/3 of the total output of phosphate compound fertilizers. The production costs of diammonium phosphate and monoammonium phosphate have risen by more than 400 yuan per ton. Most of the enterprises are on the verge of losing money. At present, there are companies that cut their production or stop production due to the high price of sulfuric acid. The phosphorus and compound fertilizer and sulfuric acid industries are in a very difficult position. The implementation of the “notice†issued by the General Administration of Taxation will increase the production cost of sulfuric acid by RMB 20 per ton, and the cost per ton of monoammonium phosphate and diammonium phosphate will increase by nearly RMB 30. This is undoubtedly worse for the phosphate fertilizer and sulfuric acid industries.
In this regard, Yang Caibin, vice president of Hubei Yangfeng Co., Ltd., also held the same attitude: “This year, all the raw materials of compound fertilizer such as monoammonium phosphate, potassium chloride, sulfur, and ammonia prices have all substantially increased, making the cost of compound fertilizer significantly higher. However, the market price is 'unchanged.' The country's increase in the import of sulfur VAT rate has virtually increased the company's production costs. This is undoubtedly an additional burden for the phosphate and compound fertilizer industries where raw material prices have risen this year."
Secondly, increasing the sulfur VAT rate is not conducive to reducing the trade surplus. Wu Xiyan further analyzed that “China’s sulphur resources are in short supply and the import dependency has exceeded 50%. In 2006, China imported 8.18 million tons of sulphur, which accounted for 31.8% of the world’s trade volume. The introduction of this policy will reduce the profitability of some enterprises. The reduction of imports will lead to a larger trade surplus.†Ya-Jie Ye, Marketing Manager of Yuntianhua International Chemicals Co., Ltd. also analyzed: “The relevant policies introduced by the state earlier canceled the export tax rebate for 2,831 products, aiming to narrow the trade surplus. And for sulphur, a product that needs to be imported in large quantities to raise the value-added tax, it will undoubtedly restrict the import of the company and it will not help narrow the trade surplus."
Thirdly, it restricted the import of energy and resources. Wu Xiyan said: "Imported sulfur is an imported resource, but also imported energy. According to incomplete statistics, in 2006, about 27 million tons of steam by-product of sulfuric acid production could replace 3.7 million tons of standard coal. These steam parts are used for power generation, and some of them are used. In chemical fertilizer or other production, the domestic annual production capacity of 1 million tons of sulfuric acid plant reaches 53,000 kWh, and the cost of power generation is only around 0.1 yuan/kWh, which is lower than other energy sources.At present, in the coastal energy shortage areas, The large-scale sulphuric acid plant is built as an energy plant and at the same time it can reduce CO2 emissions. Therefore, sulphur is imported as a dual resource of energy and energy, and is safe, environmentally friendly and conducive to the healthy development of the national economy."
Fourth, it is not conducive to energy-saving emission reduction and the development of circular economy. Yang Caibin said: “The 17% value-added tax is also levied on the processing of sulfur, which will crack down on the enthusiasm of enterprises to recover sulfur, and is not conducive to the current promotion of energy-saving and emission reduction.†Wu Xiyan also pointed out: “Sulfur is a by-product of natural gas, refining and purification processes, and sulfur. The higher the recovery rate, the lower the emission of SO2 during the use of various types of oil products and natural gas, which is conducive to reducing pollution and protecting the environment and is in line with the concept of developing a recycling economy. Therefore, the state should encourage enterprises to recover sulfur from the perspective of reducing the value-added tax rate."
In view of the above reasons, the China Phosphate Fertilizer Industry Association and related companies called on the government to encourage and encourage the import of sulphur and domestic natural gas, and refinery recovery of sulphur, to reduce or exempt the value-added tax, to really support the production of chemical fertilizer companies, and to promote domestic enterprises to do a good job of energy-saving emission reduction The development of circular economy.
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