New tax rule puts heavy pressure on Chinese scrap dealers

Chinese steel scrap dealers are facing heavier tax burdens under the new income tax rule recently introduced by the country's State Taxation Administration, market sources observed. Once the new regulation is fully implemented, a number of domestic scrap dealers would have to pay tax on at least 8% of their total income at a rate of 25%. No taxes are imposed on the remaining 92% of a dealer's income, however.

The new rule, officially launched by the taxation administration in June but yet to be widely enforced, is applicable to small-scale taxpayers in the scrap industry that have their annual sales value no higher than Yuan 5 million ($700,000) and are not equipped with a sound accounting system, Mysteel