The Chinese government is considering expanding the list of luxury items
subject to a special "consumption tax", says Wang Li, deputy director of the
State Administration of Taxation (SAT).
Wang told the first annual forum on China's fiscal reform here that tax
reform should progress with personal income tax, property tax and consumption
tax to be adjusted tp strengthen the role of taxation in reducing poverty.
did not disclose the exact timetable for the adjustment of consumption tax on
more luxury items.
A recent survey by the Horizon Research Consultancy Group showed that 40
percent of Chinese believe consumption taxes should be imposed on more luxury
items such as jewelry and VIP club memberships.
Professor Tang Gongliang, of China's elite Central University of Finance and
Economics, said periodic adjustments of the list of luxury items subject to
consumption tax were necessary to keep it up to date.
"With people's living standards increasing quickly, some items which were
once luxuries have become common and are no longer regarded as luxury items," he
The government imposed a consumption tax on disposable wooden chopsticks,
wooden floor panels, yachts, luxury watches and oil based products on April 1.
Tang said consumption tax played a big role in the regulation of income
distribution and the adjustment of consumption trends.
"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.
Official statistics show consumption tax revenue amounted to 142.85 billion
yuan (17.86 billion U.S. dollars), five percent of the total tax