The Ministry Of Commerce Has Basically Reached A Consensus On Reducing The Import Tax On Luxury Goods.

Reducing import tariffs on luxury goods is only a matter of time.

Another official of the Ministry of Commerce said that relevant departments such as the Ministry of Commerce and the Ministry of finance will be able to report to the State Council about plans to expand imports in the near future, including issues related to the reduction of import tariffs on luxury goods.

This year, the Chinese government is committed to upgrading.

"The relevant departments have basically reached agreement on the issue of reducing import tariffs on luxury goods" to help China expand imports, Yao Jian disclosed, but declined to give further details.

Last week, relevant officials of the Ministry of Finance said in an interview with reporters in the new century weekly that it is not clear about the reduction of import tariffs on luxury goods.

With the growth of per capita disposable income and the enhancement of Chinese luxury brand awareness, China will surpass Japan as the world's largest luxury consumer in 2012, and the consumption will reach US $14 billion 600 million, according to the World Luxury Association data.

But at the same time, data from the World Luxury Association show that because of China's high import tariffs and related import taxes, the amount of high-end goods consumed by Chinese people abroad is four times that of domestic consumption.

"Lowering import tariffs on luxury goods is the trend of the times, which will encourage more Chinese to consume overseas.

"It also marks a further commitment to China's accession to the WTO after its accession to the WTO," he said.

Since China joined the WTO in 2001, the import tariff of the country has decreased from 15.3% to 9.8%, but the tariff of luxury goods has remained at an average of 30%, and the import duty of red wine has reached 65%.

At the end of last year, the Chinese government said on several occasions that it would achieve trade balance by expanding imports and reduce the pressure on the outside world to demand appreciation because of the high trade surplus.

The Ministry of commerce also put forward the aim of boosting imports by proposing the import of high-tech products, environment-friendly and resource related commodities and the import of luxury goods.

The international luxury group agreed with China's move to reduce import tariffs on luxury goods.

"Tax cuts are bound to push our business in mainland China.

We look forward to this implementation, which will help us increase profits here, "MontBlanc CEO Lutz Bethge said in an interview with China Daily on Monday.

"We will expand our investment in China."

Since 2007, China has become the largest consumer market of the German luxury goods manufacturer.

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Experts say the Ministry of Finance may lack momentum to implement tariffs on luxury goods imports.

Statistics show that import tariffs on imported goods including luxury goods, import value-added tax and import consumption tax amounted to 1 trillion and 250 billion yuan last year, accounting for nearly 30% of China's fiscal revenue.

"The Ministry of Commerce and the Ministry of Finance and other departments have their own considerations. Tax cuts are not a simple matter," a commerce ministry official said on condition of anonymity.

According to official reports in the twenty-first Century economic report, the Ministry of Finance said that the Ministry of finance will implement measures to reduce import tariffs on luxury goods by October this year.

The report also mentioned that leaders from various ministries and leaders of luxury companies will meet in the near future to discuss specific matters about tax reduction.

Lillian Liu, director of public affairs and corporate communications at Estee Lauder (Shanghai), said the company had not yet received notification of such meetings.

Limited impact

Experts are skeptical about reducing the import tax on luxury goods and whether it can really boost China's imports.

"Most consumers can't afford to buy luxury goods," says Zhang Zhi Qing, deputy director of the school of taxation at Central University of Finance and Economics.

Zhou Shijian, a senior trade expert at Tsinghua University, agrees.

"Not only luxury goods, but also people's daily consumption goods should be included in the list of tariff reductions."