In order to regulate the excesses, the Chinese government is planning a new series of taxes "China plans to tax more luxury goods and could extend a ...
In order to regulate the excesses, the Chinese government is planning a new series of taxes
"China plans to tax more luxury goods and could extend a tax on property currently being tested in Shanghai and Chongqing," Lou Jiwei announced Wednesday, Minister of Finance. The latter, which was a point on the new government's reforms to the Standing Committee of the National People's Congress said that "Beijing also would tax goods causing environmental pollution or overexploitation of resources."
The new Chinese government has made reforms the new priority of its economic policy, with the main objective to achieve driven by consumption and not for export, industry and credit economy. The Communist Party during November will lead a very important meeting to appoint the economic priorities for the next ten years, with no doubt, the head of tax reform agenda.
The expansion of the property tax could affect Beijing but also Hangzhou, Shenzhen, Qingdao and Wuhan, all cities where property prices have increased significantly. The pilot tested experimentally tax in Shanghai and Chongqing currently affects owners large and expensive homes.
Reform on VAT
The tax on polluting goods would be a response from the Chinese government to growing public concern about the environment, long neglected during the years of explosive growth in the country.
"The calculation of the current tax on coal will be modified to shoot on price and not on the volume of sales, thus aligning the tax on crude oil and natural gas," said the minister. The overhaul of the tax is under consideration for many years, but the city of Beijing has so far refrained for fear of higher prices that could hinder growth.
The extension of taxes in the luxury sector, in turn, respond to the government's goal to discourage the too visible luxury in the broader fight against corruption framework.
Lou Jiwei has also confirmed that the VAT reform was, as was previously announced, was extended across the country as of August 1 to alleviate excessive pressure on businesses. The reform, launched in Shanghai in 2011 and since extended by steps will normally be completed in 2015.
