Export taxes to dent profits

Henan Yuguang Gold & Lead Co, China's biggest lead and silver producer, and Baotou Aluminum Co, said profit will be hurt by the central government's move to raise export taxes and cut tax incentives.

China imposed a 10-percent tax on lead exports effective June 1, and will cut tax rebates to five percent from 13 percent on silver exports starting on Sunday, Henan Yuguang said in a statement to the Shanghai Stock Exchange yesterday. The nation also removed a tax rebate on aluminum rods and tubes, Baotou Aluminum, controlled by Aluminum Corp of China Ltd, said in the exchange filing.

China is the world's biggest producer of lead and aluminum. The government is reducing or scrapping tax benefits for metal exporters to curb a record trade surplus and encourage production of higher-value goods.

Exports of lead may decline 10 percent by 2010 because of the cancellation of tax breaks, research firm Beijing Antaike Information Development Co said earlier, Bloomberg News reported.