MIIT releases agricultural machinery industry development policy
Beijing. August 23. INTERFAX-CHINA - China's central government will provide financial and tax incentives to agricultural machinery enterprises to spur the industry's growth, according to a development policy released Aug. 22 by the Ministry of Industry and Information Technology (MIIT).
The policy's unveiling comes as the government strives to boost the agricultural sector's efficiency and productivity, partly by increasing the rate of mechanized farming. The availability of state subsidies helped agricultural machinery sales surge by 34.48 percent year-on-year to RMB 129.77 million ($20.31 billion) in the first half of 2011, Interfax reported Aug. 17.
According to the policy, value added tax (VAT) on agricultural machinery purchases will remain at 13 percent, while hi-tech manufacturers that meet government criteria will enjoy a 15 percent corporate income tax rate. China's standard corporate tax is 25 percent.
Imports of raw materials and components critical for hi-tech machinery, such as engines, transmissions and hydraulics, will not be subject to import duties. Research and development (RD) of such components will also be encouraged by the government, MIIT said without elaborating.
In addition, tariffs will not be levied on imports of agricultural machinery that are yet to be produced domestically. Meanwhile, machinery manufacturers will be encouraged to prioritize RD of machinery used in grain, sugar, cotton and edible oil industries.
-LYB