Tax cut in sight for luxury products in China
By 2011-9-15 17:41:16
China is likely to lower the tax rate on luxury commodities to boost domestic consumption by the end of this year, China Youth Daily reported Tuesday.
"Various parties have reached a consensus on this issue," Chen Jiagui, a member of the Standing Committee of the National People's Congress and researcher with the Chinese Academy of Social Sciences, said to the paper.
Currently, almost two-thirds of global luxury brands can be purchased in China. By the end of March, the total consumption in the country reached $10.7 billion, accounting for a quarter of the global market share and ranking second in the world in terms of luxury commodity consumption after Japan, according to a report by the World Luxury Association (WLA) in July.
"Luxury products companies are compelled to raise the price of products in China due to the high taxes levied. Therefore, more Chinese choose to buy these products overseas," Ouyang Kun, the chief representative of the association, told the Global Times.
Statistics from the Ministry of Commerce show the price of 20 high-end commodities including watches, bags, clothes, wine and electronic products in the Chinese mainland are 45 percent higher than in Hong Kong, 51 percent higher than the US and 72 percent higher than France.
The total tax rate on the imported luxury commodities is about 60 percent.
Chinese overseas consumption of luxury products reached nearly $50 billion by last year, four times the domestic equivalent, WLA's report said.
"Various parties have reached a consensus on this issue," Chen Jiagui, a member of the Standing Committee of the National People's Congress and researcher with the Chinese Academy of Social Sciences, said to the paper.
Currently, almost two-thirds of global luxury brands can be purchased in China. By the end of March, the total consumption in the country reached $10.7 billion, accounting for a quarter of the global market share and ranking second in the world in terms of luxury commodity consumption after Japan, according to a report by the World Luxury Association (WLA) in July.
"Luxury products companies are compelled to raise the price of products in China due to the high taxes levied. Therefore, more Chinese choose to buy these products overseas," Ouyang Kun, the chief representative of the association, told the Global Times.
Statistics from the Ministry of Commerce show the price of 20 high-end commodities including watches, bags, clothes, wine and electronic products in the Chinese mainland are 45 percent higher than in Hong Kong, 51 percent higher than the US and 72 percent higher than France.
The total tax rate on the imported luxury commodities is about 60 percent.
Chinese overseas consumption of luxury products reached nearly $50 billion by last year, four times the domestic equivalent, WLA's report said.
From cnwinenews