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Monday, January 16, 2006

ETLT, World's longest tax ends

ETLT announced that its tax holiday would have ended sooner than they stated in their financial statements, although this could have been a translation error.

The Chinese Agriculture Tax, which predates the founding of the Roman Empire by several hundred years, finally ended a couple of weeks ago. This just shows how long it can take to get rid of a tax once it's on the books: 2,600 years. And you just know there probably wasn't even a single year when that tax wasn't enforced.

This is what ETLT had to say about it:
The tax holiday which had been granted to the Company expired on December 31, 2005. This repeal will in essence, continue the tax holiday on the Company's agricultural operations and increase its return on the developing project in Hunan Province. It is estimated that the repeal of the tax will save the Company US$3,000,000 to US$3,500,000 during the development stage of the Hunan project alone, thereby reducing the US$37,000,000 dollar cost of the development by a corresponding amount.
My first reaction was that they claimed the tax holiday expired in 2008, not 2005. In their Q3 10-Q statement filed on 11/15/2005, they say, "The Company has benefited from this holiday since inception and anticipates that the holiday will extend through July 2008."

My next reaction was, "What the hell is this Hunan project?"

It turns out that the Hunan project includes the various projects that they've been announcing. I went back over the various news items on the website and it's pretty much all stuff I've already known about, except for the reindeer experimentation thing (Sika, which we call reindeer, are originally from northeast Asia).

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