Wednesday, November 15, 2006

China considers putting consumption tax on more luxury items

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. He 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.

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