Official hints at luxury tax hike
By Jin Rong (China Daily)Updated: 2006-11-16 08:50
"Increasing the consumption tax rate on some luxury goods is well warranted," said Yi Xianrong, a researcher at the Chinese Academy of Social Sciences.
A recent survey conducted by Horizon Research Consulting, a Beijing-based market research firm, showed that 40 per cent of those polled think that consumption tax should be imposed on more luxury goods and services such as jewellery and VIP club memberships.
"Luxury items are not easily defined. For instance, some luxury electronic products such as sound equipment are not taxed as luxury items because they are so quickly updated and may become common goods very quickly," said Tang Gongliang, a fiscal policy expert at the Central University of Finance and Economics.
"Some items once considered luxuries have become common and are no longer regarded as luxury items any more," the expert said.
"So the tax regime should be adjusted accordingly from time to time," he said.
The nation collected a total of 163.4 billion yuan (US$20.7 billion) in consumption tax last year, according to figures from the State Administration of Taxation.
Consumption tax revenue totalled 142.8 billion yuan (US$18.1 billion) in the first three quarters of this year, about 87 per cent of last year's total.
However, it only accounted for 5 per cent of the total tax revenue at the same time, figures showed.
 | 1 | 2 |
(For more biz stories, please visit Industry Updates)