Business     

China may start taxing more luxury goods

China Daily, May 25, 2013

• China may start levying taxes on an increasing number of luxury goods as part of the country's efforts to push forward economic reform, an official with China's top planning agency said on Friday.

  China has become an increasingly important market for global luxury brands. [Photo / For China Daily]

  More products might be taxed, as part of the country's tax reform plans for this year, said Kong Jingyuan, director-general of the department of comprehensive reform of the economic system at the National Development and Reform Commission.

  Kong made the remarks when answering questions about a guideline with the key tasks to deepen economic reforms in 2013, which was published on the central government's website on Friday.

  In the guideline, the NDRC pledged to "properly modify the rate and scope of consumption taxes". According to Kong, the changes will be carried out both in terms of rates and structures.

  Taking into consideration the increasing national income levels, some products that used to be regarded as luxury goods are now seen as daily necessities and thus will not be taxed as luxury products, he said.

  In addition, he said, some goods that have become more common in recent years, such as luxury cars and yachts, will be subject to luxury taxes.

  Heavier consumption taxes will also be levied on "heavy-polluting and excessive-energy consuming products", according to the guideline.

  An earlier report by China National Radio said that a 20 percent extra tax will be levied on cars priced at more than 1.7 million yuan ($277,440). The report cited an unnamed source with the China Association of Automobile Manufacturers.

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