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News
China considers tax cuts on luxury goods
Mainland China is reportedly considering cutting taxes on mid to high-end luxury goods.
Guangzhou Daily reported that an unnamed source had said that a tax cut ranging from 2% to 15% was being considered, with tobacco and fine wine the first in line to benefit.
Currently taxes on luxury goods stand at 15%-25% with a few being taxed at 50%. Further taxes are then added to import duties, such as VAT and business operation and consumption tax.
The Chinese spend roughly 200 billion yuan on luxury goods in foreign countries to avoid the high rates.
The tax cuts are unlikely to weaken Hong Kong’s position as Asia’s wine hub but it could still be an important step for one of the world’s fastest growing markets.
Since abolishing wine taxes in 2008, Hong Kong has become the route the market for most of the fine wine consumed in Asia.
Rupert Millar, 23.06.2011