The Ministry of Finance and the State Taxation Administration issued an announcement on October 12 to adjust export tax rebate policies for certain products.

According to the announcement, starting from April 1, 2027, the VAT export rebate rate for new energy vehicles (NEVs) will be cut from 13% to 9%. The VAT export tax rebate for e-cigarette devices and related products will be abolished on the same date. The announcement clarifies that for products subject to consumption tax among the above-mentioned items, the export consumption tax policy will remain unchanged, and the existing consumption tax rebate or exemption rules will continue to apply.

Fu Yifu, special researcher at the Sushang Bank, told reporters from the Shanghai Securities News that the policy adjustment features targeted measures with differentiated intensity, aiming to standardize tax incentives and optimize the allocation of fiscal resources. Against the backdrop of falling macro tax burden, phasing out inefficient tax rebates and channeling limited fiscal resources to areas with greater needs is an inherent requirement of fiscal and tax administration. Meanwhile, the policy will drive a shift in industrial competition logic. The reduction, rather than full cancellation, of NEV export rebates reflects considerations to set a buffer period and avoid a hard landing. The outright scrapping of rebates for e-cigarettes demonstrates precise regulation of the sector. Overall, using tax rebates as a lever, the policy seeks to facilitate market clearing and structural optimization instead of simply restricting exports.

Fu Yifu said that in the short run, the transition period may trigger a "rush-to-export" effect. With a nearly six-month window, enterprises will have incentives to ship goods in bulk to lock in the original rebate rate. However, NEV exports rely heavily on ro-ro vessels, and shipping capacity bottlenecks may cap the scale of rushed shipments, meaning the actual impact may be lower than expected. The removal of e-cigarette export rebates has been foreshadowed by prior policies; this announcement is largely a confirmation of the trend, so the marginal rush-to-export effect will be relatively limited. In the long term, the fundamental competition landscape will transform. Enterprises will shift from price competition to capability-based competition, moving from product exports to overseas capacity and technology exports, and accelerate local deployment abroad. A return of export prices to rational levels will also help mitigate trade friction risks, and macroscopically promote dual optimization of foreign trade structure and industrial competitiveness.

Source: Shanghai Securities News