China May Impose Rare Earth Tax Due to a Huge Decline in Total Reserves

Faced with a failed WTO litigation, China will tighten again on rare earth control and integration efforts. A reporter recently learned from the authorities that departments plan to raise the tax on rare earth resources.

“The National Tax Administration, Ministry of Industry and Information, and the Ministry of Finance are having a discussion about the policies. It is estimated that the policy will be enacted in the second half year.” an expert says so. According to the current situation, tax on rare earth resources will increase largely on the basis of the existing standard, however, the specific proportion is still under discussion.

For a long time, raising the tax on the rare earth resources has been seen as an important way to  regulate the rare earth industry. The authorities said to the reporter that raising the tax rate on rare earth resources will lead to an increased market price of the rare earth from the source, which can effectively hinder smuggling and stockpiling, at the same time help reduce the negative effects caused by WTO defeat.

The European Economic Research Center said China will maintain a monopoly in the field of rare earths until 2020. At present, about 90% of the rare earth products around the world are exported from China. According to statistics, China’s rare earth reserves are only 27 million tons now, a proportion of 70% in the world drops to 30% now. By existing production rate, domestic rare earth reserves can only support 15 to 20 years.