The Ministry Of Finance Says There Is No Timetable For Reducing Taxes On Luxury Goods.

"The general tariff adjustment is at the end of the year. It may be cosmetic that is expected to be adjusted ahead of schedule.

"The Ministry of finance is worried that if the tariff is lowered, brand operators and agents will not reduce the price, which means that tariffs will be reduced for enterprises rather than for consumers."

The source said.

Ouyang Kun, chief representative of the World Luxury Association in China, told reporters: "even if ministries and commissions form a consensus on the reduction of certain luxuries, it does not mean that the tax reduction policy will soon come out".

According to the reporter, the most likely tax reduction scheme is that in the year, the cosmetic products of a category first come out of a tentative tax reduction policy. After a period of policy observation, the decline in the market price of the products will directly determine the next to the famous brand.

Delamination of luxury goods

According to Gong Huiwen, director of the Foreign Tax Research Office of the taxation department of the State Administration of Taxation, there are no special items of luxury goods in China's customs duties, but there are special considerations for levying tariffs on certain high-end consumer goods.

In the report submitted to relevant departments, the World Luxury Association suggests that public luxury goods closely related to life, such as cosmetics and perfume, are no longer the patents of the rich. They should appropriately reduce import duties and excise taxes and reduce consumption.

The World Luxury Association has refined its luxury into three grades and classes. The highest level of luxury consumption is private aircraft, yachts and luxury cars. It is classified as a category luxury goods. The brand name watches, jewelry and jewellery as the middle level are defined as B luxury goods. The luxury goods are classified as C luxury goods based on high time clothing, bags, cosmetics and perfume.

"Luxury itself is a dynamic concept. The former bicycle is a luxury product. Now the economic car is already a walking tool. The most important thing is to classify the goods in a good way. The past is a luxury product. Now it is no longer a luxury item. In the long run, it should be cut down properly. For luxury goods in the past, there is no need to lower its tariffs."

Zhao Ping, director of the Consumer Economics Research Department of the Ministry of Commerce, said.

Gong Huiwen said that luxury goods were not luxury goods, and that part of the tariff reductions were taken for granted. The adjustment of domestic consumption tax policy also took into account this problem.

Can tax reduction be reduced?

The Ministry of Commerce has made statistics. There are 20 kinds of high-end consumer goods, such as watches, bags, clothing, wine and electronic products. The difference between home and abroad is 20, the mainland market is 45% higher than Hongkong, 51% higher than the United States, and 72% higher than France.

Domestic calls for tax cuts for luxury goods argue that high tariffs cause domestic commodity prices to differ from foreign countries and become the main reason for the consumption outflow.

However, the key to bridging the gap between domestic prices and international prices is not tariffs.

Take Lancome perfume as an example, the domestic consumption tax 30%+ value-added tax 17%+ tariff 10%=57%, while the similar products Department of the United States levies import tax and value-added tax, only 8.25% of the consumption tax.

In addition to VAT and tariff, consumption tax is the cause of the high price of domestic goods.

Gong Huiwen believes that whether the luxury goods are subject to tariffs or domestic consumption tax, the two tax policies should be consistent, while tariffs will be lowered, and the domestic consumption tax should also be reduced.

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In the debate on luxury tax reduction, a key issue is whether tax cuts can be reduced.

In April this year, the Department of Customs of the Ministry of Finance conducted a survey on the comprehensive tax rate of luxury goods. After collecting and hearing opinions, it responded to the signature article of Liu Shangxi, deputy director of the Financial Science Research Institute of the Ministry of finance, and should not cancel or reduce the import consumption tax on luxury goods.

The article said that the reduction of luxury tariffs can not affect the price of luxury goods, nor expand domestic demand, which is helpless for China's economic growth.

For the domestic consumer market, brand operators and channel operators have stronger pricing power. Whether partial tax cuts can bring down prices is still unknown.

Zhao Ping said that even if the real luxury goods are reduced, the price will not decrease because of its consumption characteristics, because people want to buy luxury goods with noble feelings and social symbols.

According to the World Luxury Association's tracking, after the introduction of the cosmetics tax reduction policy, the consumer market prices will react in a few months to six months.

"Once the basic policy is released, if the effect is good, the next reduction may be luggage, and the most unlikely thing to drop is watches, jewellery and other precious metals."

Ouyang Kun told reporters.