Molybdenum Tax Increase Could Spark Higher Imports In China
China's increase in the resource tax on molybdenum, equivalent to a 4-fold gain per ton is in full effect. The increase, aimed at conserving the country's resources and curbing pollution could create a need for more imports of moly.
On February 1st, China's new resource tax on molybdenum and several other minerals went into full effect. The original announcement, made last November by the county's Ministry of Finance and the State Administration of Taxation stated the new resource tax increase was aimed at conserving the country's resources and curbing pollution. The resource tax on Molybdenum was raised to 12 yuan per ton, the China Taxation News, a publication of the State Administration of Taxation reported in the Shanghai Securities News. The new tax rate for molybdenum is the first increase since January 1st, 2006 and is spread across five different categories of mines; from class one at the high end to class five at the lowest. In detail, the applicable molybdenum tax rate rolled out as follows; first class mine is 12 yuan per ton; second class mine is 11 yuan per ton; third class mine is 10 yuan per ton; fourth class mine is 9 yuan per ton and fifth class mine is 8 yuan per ton. Overall the increase is equivalent to a 4-fold gain per ton of molybdenum. Molybdenum was not alone in the tax increase. China also hiked the resource tax on iron ore, tin, magnesite, talc and boron. The tax on iron ore experienced the highest increase, almost 20 times the previous rate according to the Shanghai Securities News. Officials from the Ministry of Finance and the State Administration of Taxation said that China's tax rate is quite low and the tax increase is beneficial for protecting their important resources. “All the minerals concerned are scarce resources which are of important strategic values. The tax raises the signal the government is strengthening efforts in resources conservation,” said a staff member from the China Nonferrous Metals Industry Association ( CNMIA) in a recent report. According to statistics from the CNMIA and the United States Geological Survey (USGS), China ranks first in terms of molybdenum reserves with 38.4 percent of the world's total.