Can Luxury Tariff Adjustment Block Foreign Purchases?

How to define high-grade goods and luxury goods, and whether tax reduction can reduce the price of luxury goods has become the focus of this "tongue battle". Why do some consumer goods that are not expensive in foreign countries become a luxury in China?

What exactly? commodity Can it be regarded as a luxury? What kind of impact will tax reduction have on people's consumption and finance?

How high is the tax?

In an interview with Beijing Xinguang Tiandi mall, Ms. Qi hang, who works in a nearby bank, said: "a COACH handbag of the same size and style will be sold for about 3800 yuan in Beijing, but in the United States, only 160 dollars will be worth less than 1200 yuan. Where do you say I will buy it? "

According to a scholar, a bottle of 100 ml French Chanel CoCo perfume is sold at a price of 1480 yuan in the domestic market. It includes 251.6 yuan of value-added tax, 444 yuan of consumption tax, 48.7 yuan of urban maintenance and construction tax, and the total tax amount has reached 744.3 yuan, which has exceeded the half price of goods.

China's current comprehensive tax on luxury goods is between 25% and 30%, while others are as high as 50%. Zhao Ping, deputy director of the Consumer Economics Research Institute of the Ministry of Commerce, said in an interview that cosmetics, for example, should pay 30% of the consumption tax, 17% of value added tax and 10% of customs duties, three of which add up to 57%.

According to the survey data released by the Ministry of Commerce, in the 20 high-end consumer goods brands such as watches, bags, clothing, wine and electronic products, the mainland market price is about 45% higher than that in Hongkong, 51% higher than that in the United States, and 72% higher than that in France. To this end, Ministry of Commerce spokesman Yao Jian has said several times that it will further reduce import tariffs, including tariffs on medium and high grade goods. However, the claim of lowering the luxury tariff is denied by the relevant officials of the Ministry of finance.

"Like perfume, cosmetics, high-end clothing," A leather bag Such tariffs on fast moving consumer goods should be abolished entirely or substantially reduced. Ouyang Kun, the chief representative of the World Luxury Association's China Representative Office, said the tariffs were too high for consumers to buy overseas, leaving trading capital outflow.

What is luxury

Ouyang Kun believes that the key to lowering taxes is to figure out what luxuries are. Only by making a reasonable definition of luxuries can we specify what taxes should be reduced.

Experts define each other in terms of the definition of luxury goods. "One of the attributes of luxury goods is non essential goods, which is beyond the scope of the actual needs of a person's survival and development." Liu Shangxi, deputy director of the Financial Science Research Institute of the Ministry of finance, said that the symbolic meaning and feeling of luxury goods far outweigh its practical functions.

But Zhao Ping believes that the concept of luxury is dynamic. Once the luxuries become more and more people's living standards, they will become necessities of life. "We believe that the tax cuts in the import sector are targeted at those consumer goods that originally belonged to luxury goods but have now been transformed into people's necessities." Zhao Ping emphasized.

As for the distinction between "luxury" and "high-end consumer goods", there is no strict definition. However, a strange phenomenon is that some products that can only be regarded as ordinary consumer goods in foreign countries and even "middle and high-end consumer goods" are not considered to be commodities. In the United States, Levi's (Levis) jeans sell for about 30 dollars, while Claus shoes (CROCS) are only 9.9 dollars; however, in China, Levi's is positioned in the middle and high end, the basic cost is seven hundred or eight hundred yuan, and CROCS shoes are sold for 499 yuan.

Can tax cuts block foreign purchases?

The World Luxury Association's latest survey shows that in 2010, the total consumption of luxury goods in the mainland of China amounted to 10 billion 700 million dollars (excluding private aircraft, yachts and luxury cars). China is expected to surpass Japan next year and become the world's largest luxury consumer.

However, in 2010, the total consumption of luxury goods purchased by Chinese tourists in the European market amounted to nearly 50 billion dollars, 4 times that of the domestic market. The price gap has caused the strong purchasing power of Chinese tourists overseas, leading to China. Luxury goods Consumption is seriously "spillover".

In Liu Shangxi's view, China is still a developing country. In a country where GDP per capita has just reached 4000 dollars, luxury consumption accounts for 1/4 of the world. This is a phenomenon worth reflecting, reflecting the existence of a malformed state of luxury consumption.

However, Zhao Qingming, a senior researcher at China Construction Bank, believes that lowering the tax burden on imported luxury goods will not only reduce the price of domestic luxury goods, but also reduce the price of ordinary brands, which is beneficial to the expansion of consumption of similar products in China. {page_break}

Where is it?

Reducing the tax burden of imported luxury goods is facing a dilemma: on the one hand, we must regulate the high consumption through consumption tax and protect domestic industries, but on the other hand, lowering taxes can increase consumption, and the key is how to balance foreign trade.

Liu Shangxi introduced that in 2010, there were three taxes in the import link, 1 trillion and 251 billion 847 million yuan, all of which belonged to the central tax, the main source of expenditure at the central level, and 1 trillion and 598 billion 973 million yuan at the central level in 2010. It is easy to see the weight of the import tax. If the import tax is abolished or lowered, it will have a greater impact on the revenue. At the same time, the main consumer of luxury goods is the rich. The consumption tax on imported luxury goods, that is, taxing the rich, can play a role in regulating the gap between the rich and the poor.

Jin Dongsheng, deputy director of the Taxation Research Institute of the State Administration of Taxation, also pointed out that luxury goods belong to special commodities, which are generally monopolized. The added value of the brand is very high, the price elasticity is very small, and the tax adjustment function is limited.

However, Zhao Ping believes that lowering the import tax on consumer goods does not mean a decrease in revenue. The tax on the existence of import tax of middle and upper grade consumer goods will be reduced. However, the income tax in the form of income tax, value-added tax and business tax will increase, which will lead to a structural adjustment process. At the same time, she believes that once we reduce the tax burden on high-end commodities, it is entirely possible to attract relevant brands to set up factories in China, which is of great significance for expanding consumption and promoting employment.