Govt annuls naphtha consumption tax for use in ethylene production

Tag : solvent naphtha

The statutory tax rates of naphtha, solvent oil, lubricating oiland fuel oil will work again and there will be an exemption ofexcise duties for the imported naphtha, domestically made naphthaand domestically processed naphtha used as the chemical rawmaterials.

Recently, the reporter learned that since January 1 this year, theState made adjustments to the policy on excise duties of someprocessed oil including naphtha.

The Circular jointly issued by the Ministry of Finance (MOF) andthe State Administration of Taxation (SAT) regulates that fromJanuary 1 this year the unit tax rates of naphtha, solvent oil andlubricating oil will be RMB 0.20/ liter, and the unit tax rate offuel oil will be RMB 0.10/ liter.

The Circular also regulates that, from Jan. 1, 2008 to Dec. 31,2010, there will be exemption of excise duties for imported naphthaand the domestically made naphtha that is to be used as the rawmaterials of ethylene and aromatics products. The excise duty onthe naphtha directly sold out by production enterprises shall belevied according to legal provisions. The specific measures forlevy or exemption of excise duties on naphtha shall be separatelydetermined by MOF and SAT.

The taxable consumption goods using the taxed naphtha, lubricatingoil and fuel oil that are taken back by way of purchase orconsigned processing as the raw materials, it is permitted that thetax money paid for the excise duties of the raw materials can bededucted from the payable tax amount of the excise duties.

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