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Official hints at luxury tax hike

By Jin Rong (China Daily)
Updated: 2006-11-16 08:50

Financial experts yesterday applauded a top tax official's suggestion that consumption tax on luxury items may be raised in a bid to boost its role in fighting poverty.

"We are considering further increasing our tax rate on some high-end luxury goods," Wang Li, deputy head of State Administration of Taxation, told a fiscal and tax policy forum on Tuesday.

"China will continue to improve its consumption tax system to let it play a bigger role in poverty alleviation," the tax official told the forum.

"In that process, we are striving to improve our personal income, property tax and consumption tax regime," Wang was quoted as saying by the Shanghai-based China Business News.

But Wang did not reveal specifics on when the adjustment would take place.

"It should be more appropriate to say that we are going to adjust the tax codes for luxury items, instead of saying we are simply to raise tax for luxury goods," a senior official from Law and Regulation Department at the State Administration said yesterday.

"The tax code for the luxury goods will be adjusted from time to time," said the official, who requested anonymity and declined to elaborate.

China made sweeping changes to its consumption tax regime in April, slapping a consumption tax on disposable wooden chopsticks and luxury items such as yachts and golf clubs.

This was the largest adjustment to the consumption tax regime since its introduction in 1994.
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