China may spread increased taxation on more luxury product categories
According to a news report by Xinhua News Agency, consumption taxes in the country are set to increase in order to incorporate more luxury products. Finance Minister Lou Jiwei’s report for the National People’s Congress, includes an increase in consumption tax for products that require large amounts of energy, and heavy pollutants.
This news comes as yet another blow to the already unstable Chinese luxury market which has seen a decrease in sales in the past 8 months. Slowdown in demand for luxury products in mainland China has been attributed to several factors, including the government’s crackdown on luxury gifting. This year alone has driven a lot of Chinese shoppers out of the country in order to more affordably purchase luxury goods, as taxes for consumption and import have been rising.
Currently luxury watches in China already include a 20 percent consumption tax, with jewelry (diamond, gold, silver, and platinum) amounting to a 5 percent tax.