The Central Administration of Customs of the People’s Republic of China has promulgated a policy to abolish consumption tax for Xiamen Dadeng-Taiwan Small Goods Free Trade Market for the import of Taiwanese commodities.

The policy is expected to reduce consumption tax by at least two million yuan ($326,500) per year for the market, in Xiamen, Fujian province. The first batch to benefit from the new policy is 680 boxes of Kaoliang liquor imported from Taiwan, with a tax exemption of 72,000 yuan.

Taiwanese goods entered the Xiamen Dadeng-Taiwan Small Goods Free Trade Market with a favorable policy of exemption from tariffs and valued-added tax. However, some commodities, including cosmetics, jewelry, jade, and upmarket watches, are still liable for the consumption tax.

The market has levied consumption tax of 15 million yuan since 2008, involving 440 commodities and 46 enterprises. The new policy will cut the tax by at least 2 million yuan every year and attract more high-value Taiwanese commodities to enter the market.

The new policy will contribute to the transformation of Dadeng market’s structure, enlarge the scale of commodities and enhance market competitiveness.

Xiamen Dadeng-Taiwan Small Goods Free Trade Market is the first tax-free market for small Taiwanese goods in the Chinese mainland, which imported 38,700 tons of Taiwanese goods with a value of 234 million yuan in the first half of 2014.