Some petrochemical raw material varieties in Shandong will be exempt from tax

At the beginning of the new year, the new government of consumption tax, which has caused the local refineries in Shandong Province to worry about, has finally turned a corner. The Shandong State Taxation Bureau issued the announcement of the State Administration of Taxation of Shandong Province on the issue of the management of refined oil consumption tax (hereinafter referred to as “Document 10”), and further explained the documents No. 47 and No. 36 issued in the previous period.

Since the issuance of No. 47 document by the State Administration of Taxation in November 2012, the issue of consumption tax has caused heated market debates. According to the contents of the document, “Products processed by crude oil or other raw materials under the conditions of normal temperature and pressure (25°C/standard atmospheric pressure) by taxpayers in liquid form (excluding bitumen) are subject to the national standards of the product or the petrochemical industry. The corresponding provisions of the standard (including the name of the product, the quality standard and the corresponding standard) are all levied on consumption tax. According to this statement, the main reconciliation of gasoline raw materials such as MTBE, mixed aromatics, and aromatics and gasoline is within the scope of the levy.

This time, Article 10 of the document mentioned in the first article of the "General Administration Bureau No. 47 of 2012, the first article, the second article referred to as 'other raw materials' temporarily held by 'other raw material oil' master." This explanation or will make Aromatic gasoline and MTBE are excluded from the new version of the excise tax collection. Because both the MTBE device and the aromatization device raw material are gas C4. At the same time, the cost of oil adjustments has not risen as much as expected in the previous period. In addition, market panic caused by the sudden increase in the cost of aromatization device products may temporarily ease.

However, due to the large number of products involved in the No. 47 document and the ambiguous nature of the documents concerning the tax-related products, the market has continued to contend with the issue of not levying consumption tax. Gasoline producers believe that there is a double levy (gasoline includes consumption tax); deep-processing companies have the cost of inversion difficulties; oil distillers believe that this will seriously squeeze the gasoline market; and some traders are bullish outlook, actively stocking. The oil market is polarized and the market outlook is also ambiguous.