Proposed 5% Excise on Lead-Acid Batteries May Be Dropped

SHANGHAI, Apr. 1 (SMM) – Wang Jinliang, Vice President of the China Battery Industry Association, revealed on March 23 during the 8th Shanghai Lead & Zinc Summit that a reduction or abandonment of the proposed excise tax on lead-acid batteries is under discussion, to the delight of producers.

The proposed 5% excise on lead-acid batteries aroused heated discussion at the summit. Chaowei Power’s Director Zhou Zhaoxue indicated that most battery producers operated near or even slightly below their cost lines last year and were hurt by the price war. The proposed 5% excise would further constrain battery producers operating on such tight margins, adversely affecting development of the whole industry. Battery producers hope that the government will refrain from imposing such a tax until the industry can settle back into sound development.

Hong Yu, Vice President of Leoch International Technology, opined that there is no guarantee that the excise will have the desired environmental protection effects, but that its impact on battery exports is quite clear. 

Zheng Haidong, Chairman of Wuhan Changguang Power, similarly believes the tax will be a serious blow to battery exporters. Chinese exporters will find themselves at a disadvantage as Vietnam, Indonesia, and India impose no comparable tax on their battery exports. On the contrary, these countries proffer export rebates. Some companies hinted that production may be offshored should the excise be imposed.