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Duty-free goods company founded in Hainan (2)

(People's Daily)

17:40, November 09, 2011

Concession helps control profits, generate revenue

An official explained that, in the duty-free goods business, the central taxes of import links, including the tariff, value-added tax and consumption tax, are exempted, the business operators have very strong advantages and their profits rely on the special policies of the country.

China uses the mode of a duty-free goods concession, and it means that the Ministry of Finance of China can adjust the profits of enterprises trading in duty-free goods by collecting the concession fee. Currently, this form of concession setup could also be found in duty-free businesses of many other countries.

There are mainly five nationally-recognized duty-free operators on the Chinese mainland: Zhuhai Duty-Free Enterprise Group Co., Ltd, Shenzhen State-Owned Duty-Free Commodity (Group) Co., Ltd, China Duty-Free Group Co., Ltd, Foreign-invested Sunrise Duty-Free (China) and the newly established Hainan Duty-Free Co., Ltd.

The government will not approve the establishment of new duty-free operators in other regions. To offer special supporting policy measures to the offshore duty-free policy in Hainan, the government has approved the establishment of the Hainan Duty-free Co., Ltd and provided it with a duty-free product franchise.

The offshore duty-free policy is an exclusive policy introduced by the central government to Hainan province instead of a universal policy. Furthermore, because duty-free product operations are a type of state-run franchise sector, they should be under strict control. Therefore, the government has no plans to approve the establishment of new duty-free product operators in other regions.

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