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After being eligible for the EMDG scheme, it is also important to know what are the
expenditures which can be claimed. First of all, EMDG recipients like Sasy n Savy
can claim for overseas representatives. Expenses of having an representative to
promote our product from the country we export to can be claimed. As an example,
Sasy n Savy can claim their expenses of having a representative in China to promote
their skin care products. Secondly, expenses of consulting Marketing Consultants
can be claimed too. If Sasy n Savy wish to consult them for export researches and
marketing opportunities, the cost can be claimed. Thirdly, Marketing visits are also
one of the eligible expenditures. Sasy n Savy may claim for the cost of travel during
marketing visit which include airfares and departure tariffs and also an allowance of
$300 per day to support accommodation and living costs. Communication expenses
such as faxing and phone calls and providing free samples of their products
promoting for export can also be claimed under EMDG. Other than that, Sasy n Savy
can also claim the cost of joining international trade fairs or similar activities, outer
costs of promotional materials such as website development, printing brochures and
advertising, the cost of bringing over potential buyers from overseas to Australia for
an eligible export promotion purpose, and registration of eligible intellectual property
such as patents and trade marks.
EMDG is a very helpful scheme by the Australian Government for every Australian
exporters like Sasy n Savy as it encourages them to develop into overseas market
and most importantly it reduces financial challenges in many businesses. As the
EMDG scheme is under review, Sasy n Savy is happy to tell their experience under
the scheme and to encourage its continuation and expansion. The review letter dated
19th March 2015 from Samea Maakrun to the EMDG review secretariat is attached.
Other than the Export Market Development Grants (EMDG) Scheme, Export Finance
and Insurance Corporation (EFIC) is another Australian Government incentive which
might have helped Sasy n Savy Pty Ltd. By means of EFIC, the Government
allocates insurance and financial support to help Australian exporters to get rid of
financial problems when exporting overseas. As the Governments export credit
agency, EFIC helps export business to start successfully by working directly with
exporters and their banks to issue loans and guarantees, bonds and insurance
products that caters the needs of exporters. Small and medium enterprises (SME)
that are exporters, Australian companies looking to expand their business operations
overseas to better service their clients, Australian companies in an export supply
chain, and Australian companies operating emerging and frontier markets are helped
by EFIC in partnership with the banks to provide financial solution.
In this case, Sasy n Savy Pty Ltd falls in the category of SME that are exporters.
However, there are no proofs that Sasy n Savy Pty Ltd has received help from EFIC,
but it is suggested that EFIC can also be a good support for Sasy n Savy in the future
if they wish to expand to other countries.
International Trade Controls
As Sasy n Savy Pty Ltd has expanded to many countries, China is one of the largest
platform for Sasy n Savy in Asian Market. Beauty and personal care continued its
massive growth in China in 2013, due to rising disposable incomes and growing
awareness of hygiene and personal appearance. Data from Euromonitor shows that
total retail sales of skin care and make-up products in China reached RMB131.4
billion and RMB18.8 billion respectively in 2013 (Consumer products to China).There
are a number of factors in the consumer product market in China that influence the
opportunities available to Australian exporters such as Sasy n Savy Pty Ltd. First of
all, Australia is recognized by local consumers as having a cleaner and greener
environment with better quality products and brands. Food and skincare product
safety is the main concern of Chinese consumers. As a consequent to this, there are
increasing demands for skincare products with multi purposes such as moisturizing,
anti-ageing and whitening features. Additionally, Chinas Ministry of Finance
announced that from 1st January 2012 onwards, tariffs on 730 categories of items in
which these products are categorized will be lowered to an average of 4.4 %. Tax on
imported skin care products are now at 5 % , 1.5 % lesser from the previous level of
6.5 %(Source: Chinas Cosmetics Market 2011,Li & Fung Research Centre, February
2012)(Consumer products to China).The step is taken to increase imports and
reduce countrys high inflation rate. China has importantly reformed its trade policies,
reduced tariff barriers and generally obeying to the international standard practices
after participating World Trade Organization (WTO). Tariff is one type of the trade
controls. Importing and exporting to china involves 3 types of taxes which includes
Value-Added Taxes (VAT) for imported goods, Consumption Taxes for imported
goods and custom duties. In order to import Sasy n Savy products, Chinese
consumers are required to pay these taxes. Based on the indicative tariffs set on
personal care, cosmetics and apparel items, for skin care items such as toners and
moisturizers, 5 % of duty tax and 17 % of VAT are payable. For hair care items such
as shampoo and conditioner, 6.5 % duty tax and 17 % of VAT are payable. Then, for
essential oils, 20 % of duty tax and 17 % of VAT are payable (Consumer products to
China).
References
1. Consumer products to China (personal care, fashion), Austrade, viewed 01
May 2015, <http://www.austrade.gov.au/export/exportmarkets/countries/china/industries/Consumer-products#.VUiod0uZb1o>.
2. Key Outcomes of China-Australia FTA, Department of Foreign Affairs and
Trade, viewed 01 May 2015, < http://dfat.gov.au/trade/agreements/chafta/factsheets/Pages/key-outcomes.aspx>.