Velvet Tax Reduced 30%

23-Mar-2004

Deer Industry New Zealand is very pleased to receive today’s news that a Special Excise Tax on velvet exports to Korea has been reduced by 30% for the rest of the year.

The tax is currently set at 7%, on top of other duties and charges and will drop to 4.9% from 24 March until the end of the year.  This brings total border charges down from around 44% to 40.4% and, represents a saving of more than a million dollars in reduced border charges.

Deer Industry New Zealand has been lobbying for the abolition of the Special Excise Tax for more than 6 years and today’s reduction comes on the back of a 30% reduction achieved last year which saw the Special Excise Tax come down from 10% to 7%.

“This is great news and very good progress”, says Deer Industry New Zealand CEO MJ Loza, “but there is still some way to go.  The high border charges that apply to velvet in Korea have a significant distorting affect on trade and encourage unofficial trade.  We will continue to push for the abolition of the Special Excise Tax which would see total border charges drop to 32% - still too high, but significantly better than close to 50% two years ago.”

For the last two years, Deer Industry New Zealand has commissioned lawyers in Korea to lobby the Korean government and officials for the abolition of the Special Excise Tax. “We have had great progress over the last two years, but this has been on the back of significant groundwork laid by the Ministry of Foreign Affairs and Trade and the New Zealand Embassy in Seoul” says Loza.

Velvet exports earned returns of $30 million last year and Deer Industry New Zealand estimates that approximately 85% of all velvet exports are consumed in Korea.