A continued ban on the importation of raw hides (commodity serial number 4101-4103) and the direct export of semi and finished leather.

The import of semi-processed leather such as wet-blue (commodity serial number 4104-4106), where it is subsequently converted to finished leather and re-exported are free from duty and vat. This is a major change compared with the previous policy where finished leather converted from imported wet-blue had to pay duty and vat upon entry. There was also no vat rebate upon export and no drawback on the duty paid.

The import of raw hides and skins (4101-4103) where they are subsequently processed and converted into leather products (such as footwear, bags, garments etc) and re-exported are free from vat and duty in 2009 with no definite termination date agreed. Previously, this tax-free policy was scheduled to expire on December 31, 2008.

Adjustment of export tax rebate

The rebate on leather footwear and bags increased to 13%. Previously it was 11%. This change took effect from December 1, 2008.

The rebate on leather and fur apparel and leather gloves will be increased to 13% from April 1, 2009. Previously, it had dropped to 5%.