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China might cut luxury import taxes

By Hao Yan (chinadaily.com.cn)
Updated: 2011-06-20 15:56
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The import tariffs on high-end goods might be reduced by 2 percent to 15 percent, and the decision "will be finalized soon," the Guangzhou Daily reported Monday.

The new tariff policy likely will be applied first on cosmetics and expensive tobaccos and liquors, but the specific plan and launch date depend on the final version by the Ministry of Commerce and the State Administration of Taxation, sources who participated in discussions about the plan told the newspaper.

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Reducing import taxes on cosmetics and high-end watches will encourage domestic sales, helping redirect some Chinese consumer spending from offshore markets to domestic markets, Jiang Zengwei, the vice-minister of commerce, said earlier.

China’s spending on luxury goods last year reached 68.4 billion yuan ($10.6 billion), according to China Luxury Market Study 2010 by the consulting company Bain & Co, the newspaper said.

Spending on cosmetics, perfumes and personal care products topped the list of top-selling luxury consumer goods at 16.9 billion yuan, followed by watches at 15.5 billion yuan.

Ministry of Commerce spokesman Yao Jian said on June 15 that related ministries and commissions will work together to study and design a new tariff policy.