Chinese Online Class - China to raise luxury taxes further

CHINA / National

China to raise luxury taxes further

(Reuter)
Updated: 2006-11-15 14:21

Beijing -- China is considering further tax increases on some unspecified
luxury goods after slapping taxes on watches, golf clubs and other
high-end items in April, a senior tax official said.

Guests take mobile phone snapshots of a gold bathtub at the  2006
Millionaires' Fair, an invitation only luxury gala, at the Shanghai
Exhibition Center. China is the world's third-largest consumer of
high-end fashions after Japan and the United States. [Newsphoto/file]

Wang Li, a vice head of China's State Administration of Taxation, gave no
details of the timing or scope of the proposed increase.

Related readings:

40% of Chinese want more luxury tax
China revises consumption tax
Rolls-Royce adding staff to meet China's luxury car demand
For China, a full embrace of luxury

"China will continue to improve its consumption tax system and further
raise tax rates on some high-end luxury goods," he told a forum on
Tuesday without elaborating.

Wang made only a passing reference to possible adjustments to luxury
taxes in a lengthy speech that focused on broad reforms to the country's
tax system.

But his words could discomfit western luxury goods firms that are wooing
China's small but fast-expanding monied class.

China adjusted consumption taxes in April for the first time in more than
a decade to encourage a shift in spending patterns.

It made shampoo and skincare products more affordable for ordinary
Chinese but jacked up the cost of running cars with large engines, in
keeping with efforts to curb pollution. Tax on yachts also went up.

Switzerland, which says it accounts for 99 percent of all luxury watches
imported by China, reacted angrily to a 20 percent tax on high-end
watches and lobbied Beijing to change its mind.

Beijing declined, saying the tax applied to local as well as imported
watches.

France's LVMH, the world's biggest luxury goods firm, which makes Louis
Vuitton bags and Dior perfumes, said at the time it did not expect to be
badly affected by the change.

Further tax tweaks were still in the initial planning stages, according
to an unnamed finance ministry tax official quoted by the China Business
News.

Related Stories 

� Dispute over sports car for China's most famous monk
===========================================================================
� Event targets deep-pocket consumers
===========================================================================
� Louis Vuitton to open 3 new stores in China
===========================================================================
� Millionaires' Fair in Shanghai proffers luxe
===========================================================================

Top China News 

� China urges Japan to abide by non-nuclear princles

� Plastic surgery reality show sparks debate

� China confirms arrest of two Taiwan spy suspects

� CCB: Reports on non-performing loans 'untrue'

� WB sees China's economy growing by 10.4% in 2006

Today's Top News 

� APEC ministers agree on 5 FTA/RTA model measures

� China to raise luxury taxes further

� Wen tells US: Protectionism hurts

� Rumsfeld faces war crime lawsuit

� APEC leaders to talk trade, security

Most Commented/Read Stories in 48 Hours

Learn Chinese, Chinese Online Class