Government considers consumer tax reform
China may overhaul its consumption tax and many experts are recommending tax cuts on cheaper cosmetics, while raising taxes on luxuries such as tobacco and golf.
The Ministry of Finance has submitted a tax overhaul proposal to the State Council, China’s cabinet, sources said. The proposal would be another step toward a broader tax code overhaul following reforms of the value-added tax in May.
The overhaul may have wideranging implications, from spurring budget-conscious smokers to kick the habit or making it less desirable to take a trip to South Korea to load up on beauty products.
It also could tip the balance of government finances: Whether to give a greater share of consumer tax revenue to provincial governments instead of the central government is also being debated at the State Council.