China will resume levying value-added tax on fertilizer sales and imports to meet new market conditions, according to a joint ministry statement on Tuesday [11 August 2015]. The VAT taxation rate stands at 13 percent and the new rule will take place starting from September 1, according to the statement released by the Ministry of Finance, Central Administration of Customs and State Administration of Taxation…Full Article: China Daily Aug 2015

Key Point

  • In 1994, China exempted fertilizer sales and imports from VAT in order to maintain a stable fertilizer supply and prices.

ChinaAg Comments

  • In July 2015, China’s Ministry of Agriculture noted that less than 33% of fertilizers and pesticides are absorbed by crops.
  • In December 2014, a Chief Researcher at the Botany Institute of the Chinese Academy of Sciences stated that China utilizes 400 kg of chemical fertilizers per hectare, well above the internationally recognized safe average of 225 kg per ha.
  • In 2013, China utilized a total of 59.1 million MTs of fertilizers, of which nitrogenous and compound (i.e. NPK) were the most commonly used. Henan province was the largest consumer of chemical fertilizers.
  • In 2012, China consumed 58.3 million metric tons of chemical fertilizers, of which 48% (~23.9 million MTs) was nitrogenous fertilizer, 34% (~19.8 million MTs) was compound fertilizer (e.g. NPK, etc.), 14% (~8.2 million MTs) was potash, and 11% (~6.1 million MTs) was phosphate. Henan, Hubei, and Sichuan were the largest consumers.

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