Beijing -- China is considering further tax increases on some unspecified
luxury goods after slapping taxes on watches, golf clubs and other high-end
items in April, a senior tax official said.
take mobile phone snapshots of a gold bathtub at the 2006
Millionaires' Fair, an invitation only luxury gala, at the Shanghai
Exhibition Center. China is the world's third-largest consumer of
high-end fashions after Japan and the United States.
Wang Li, a vice head of China's State Administration of Taxation, gave no
details of the timing or scope of the proposed increase.
will continue to improve its consumption tax system and further raise tax rates
on some high-end luxury goods," he told a forum on Tuesday without elaborating.
Wang made only a passing reference to possible adjustments to luxury taxes in
a lengthy speech that focused on broad reforms to the country's tax system.
But his words could discomfit western luxury goods firms that are wooing
China's small but fast-expanding monied class.
China adjusted consumption taxes in April for the first time in more than a
decade to encourage a shift in spending patterns.
It made shampoo and skincare products more affordable for ordinary Chinese
but jacked up the cost of running cars with large engines, in keeping with
efforts to curb pollution. Tax on yachts also went up.
Switzerland, which says it accounts for 99 percent of all luxury watches
imported by China, reacted angrily to a 20 percent tax on high-end watches and
lobbied Beijing to change its mind.
Beijing declined, saying the tax applied to local as well as imported
France's LVMH, the world's biggest luxury goods firm, which makes Louis
Vuitton bags and Dior perfumes, said at the time it did not expect to be badly
affected by the change.
Further tax tweaks were still in the initial planning stages, according to an
unnamed finance ministry tax official quoted by the China Business