China taxes luxury goods
Shanghai, China - China has announced several new sales taxes, on goods ranging from disposable wooden chopsticks to luxury items such as yachts, citing a need to protect the environment and redress the gap between rich and poor.
The Finance Ministry announced the change in policy, which took effect April 1, on Tuesday, the official Xinhua News Agency reported.
Buyers of yachts, golf balls and golf clubs will face a 10 percent tax, while luxury watches will be taxed at a rate of 20 percent, it said.
The change reflects the communist leadership's goals of countering the widening gap between rich and poor and of protecting the environment, which has been ravaged by more than two decades of industrialization.
The current tax on skin care and hair care products such as shampoo will end on April 1, the report said. That tax was imposed in 1994, when such products were still considered luxuries. Thanks to China's rising level of affluence, they are now viewed as daily necessities.
The 5 percent taxes on disposable wooden chopsticks and on wooden floor panels are intended to discourage consumption of items that are blamed for wasting scarce timber resources, the ministry said.
China makes about 15 billion pairs of throwaway chopsticks a year, consuming some 71 million cubic feet of wood, the report said.
To discourage waste of petroleum products, the government will levy taxes on solvents, lubricants and aviation fuel, the ministry said. But the taxes will be only partially imposed to help cushion the impact on industries already facing price hikes due to rising crude oil prices.
The report did not say if taxes on other products would also change. They include cigarettes, alcohol, jewelry, fireworks, gasoline, diesel, vehicle tires, motorcycles and compact cars.
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