Consumption Tax of 5% May be Imposed on Lead-acid Batteries in China

SHANGHAI, Nov. 26 (SMM) - China’s lead-acid battery industry has been roiled by resurgent news that a consumption tax might be imposed on battery producers. Of greater concern to leading producers is the possibility that illegal and unqualified manufacturers might dodge the tax.

The prospect of a consumption tax on lead-acid battery producers first came to light in late November, 2012. The State Administration of Taxation and the Ministry of Finance proposed a 5% consumption tax on the industry. A year later, these two agencies are purportedly revisiting the tax possibility and in negotiations with industry associations and prominent enterprises. SMM has confirmed that this is highly possible that the consumption tax may be imposed soon.

Sluggish consumption means that lead-acid battery producers will find it difficult to pass tax costs onto consumers.

SMM believes such tax imposition must be such that it does not disadvantage legitimate producers nor does it risk failing to improve environmental protections.