Reducing tax rebate is the trend of drug companies to meet the rebate of API

Judging from the overall situation of this year's API show, the exhibitors' confidence is obviously more than enough: not only have many new corporate faces emerged in some important exhibition areas such as special exhibition areas, many raw material companies also said that although the production costs have risen at an unprecedented rate this year, However, due to higher sales prices of products, corporate days are still relatively good.
On the other hand, a better life does not mean that the company has embarked on the “Golden Avenue” since then. According to Gan Rongfu, senior industry researcher of Sinopharm Holding Co., Ltd. who attended the exhibition, after entering 2008, domestic raw material and pharmaceutical companies will face more uncertain factors such as continued decline in export tax rebate rate.
Reducing tax rebate is a general trend. Health Net statistics on the data of relevant chapters such as Code of Customs Tariff No. 29 “Organic Chemicals” and Chapter 30 “Pharmaceuticals” and found that it includes chemical preparations, chemical raw materials, and biochemicals. The total import and export of 5 types of pharmaceutical products, such as plant extracts and proprietary Chinese medicines, totaled 16.3 billion U.S. dollars (2007 year), and the imports and exports of more than 80 varieties such as citric acid exceeded 100 million U.S. dollars, of which, chemical raw materials Accounting for the largest proportion of China's pharmaceutical import and export.
According to the current policy of China's relevant tax rebate rate, the export tax rebate for the billions of imports and exports of the pharmaceutical industry each year will involve export rebates of several billion U.S. dollars. It can be said that the export tax rebate in the past a long period of time is the profit protection of China's raw material drug export trade. Many products can only report very low prices because they have 5% to 13% of profits. Some low-cost, low-tech, low-price, low-profit products can be accelerated due to the protection of tax rebates. The tax rebates of these products have long lost their original meaning.
In October 2003, the country reduced the tax rebate rate for most of its export commodities from 17% to 13%, and began to reform the current export tax rebate mechanism; in June 2007, another round of export tax rebate adjustments was introduced and the scope of spread widened. Since this time it was adjusted according to the export tax code, some high-tech, high-value-added raw material medicine products were also included in the tax refund. Antibiotics and vitamins escaped.
In April this year, Zhang Peisen, deputy director of the State Administration of Taxation Research Institute, said in an interview that "the state will cancel export tax rebates on a large scale." At the same time, the Industrial Structure Guidance Catalogue (2007 edition) jointly issued by the Development and Reform Commission and the Ministry of Commerce clearly stated that it would continue to limit the export of the “Three High” products.
It can be said that lowering the tax rebate rate is a general trend. While further liberalizing trade policies, the state also encourages enterprises to participate in international competition with a more open attitude.
Tax rebates are not a major concern. In fact, after years of development, the overall strength of China's bulk pharmaceutical industry has made significant progress, and its international competitiveness has also increased significantly. Some varieties have a certain amount of discourse power internationally.
In this regard, Chen Hongfeng, marketing manager of Hebei Shengxue Dacheng Pharmaceutical Co., Ltd. who participated in the exhibition, analyzed that, to a certain extent, the profits of enterprises’ export tax rebates are currently not obtained by themselves. More often than not, companies will give up tax rebates to them. Foreign buyer. "For example, the sales price of a certain drug substance type in China is 70 yuan/kg. It does not refer to this price when it is exported, and it is often lower than the domestic price. One of the important reasons is that the trade volume of this species is relatively large. The export price of the product is determined after subtracting the tax refund, so the price is relatively low. On this basis, the raw material drug companies facing fierce competition are offset by the benefits from the tax rebate policy." For domestic raw material pharmaceutical companies, although the value of export tax rebates on the profit index is relatively large, in fact, the impact of changes in the exchange rate of the renminbi on corporate trade is even more profound.
At present, the production of many bulk APIs in the country is dominant in the world, and China can even be regarded as the only producer of some APIs in the world. If tax rebates continue to be reduced or even cancelled, companies must adjust their product prices. There is no doubt about this.
Since last year, the rise in the prices of many raw material medicine products has also reflected that domestic related companies do have considerable pricing power. If the short-term response to rising prices alone, the latest changes in tax rebate policy seem to have little effect on the company, but from the medium-term and long-term effects, domestic companies will raise prices, will it cause other manufacturers to resume production? Under such circumstances, what kind of attitude will domestic companies gradually lose their low-price advantage to compete with? These are all concerns of the industry.
The company hopes to have a buffer period. Reporters learned at this exhibition that many companies have basically accepted the fact that tax refunds will gradually be eliminated. However, we are still concerned about the timing and implementation of tax refund cancellations.
Some people in the industry frankly stated that after the cancellation of the tax rebate, there may be some “side effects” on the company in the short term, but after a period of adjustment, they can also adapt. Public companies are calling for a period of buffering when the government releases the policy. Even if some enterprises try to slam the export within the buffer period, it will actually affect it.
Wu Huifang, the chief researcher of Health Network, believes that the possibility of a "sudden attack" on the country's next export tax rebate policy is unlikely, and there should be some degree of specific implementation. In addition, if the tax rebate adjustment can be categorized according to the variety, it is the best. "The last adjustment was based on the eight-digit export tax code number and the tariff code number was also differentiated by product," she said. "But a tax code number often contains several or even hundreds of products, such as The “other unlisted antibiotics” number contains at least hundreds of different products. Therefore, it is not scientific to use tax codes as the basis. At the same time, she also admits that it is really difficult to distinguish the differences by species. Very large, it is recommended to sort according to the importance of the product's industry and export, and important products should be considered. In addition, the export of pharmaceutical preparations is one of the directions encouraged by the country in the future, especially the products with independent intellectual property rights and high added value.

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