STOCKS | China Restores Consumption Tax On Lithium Batteries

China has restored consumption tax on lithium primary batteries, lithium-ion batteries and vanadium flow batteries, with the levy taking effect in stages, according to ETNet. Under the policy arrangement released by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration in July, five battery categories used in electric vehicles and energy storage systems will be taxed at 2% from September 1, 2026, rising to 4% from September 1, 2027. The policy also sets a 2% consumption tax on photovoltaic batteries from April 1, 2027, before lifting the rate to 4% from April 2028. Sodium-ion batteries, solid-state batteries, fuel cells and certain photovoltaic battery types will be exempt from consumption tax from September 1, 2026 to December 31, 2028.