Chinanews, Beijing, Dec. 31 – As approved by the State Council, China will start to raise the tax rate for some imported goods as of Jan.1, 2007, so that they will be in line with the consumption tax rate imposed on some domestic goods. These include goods that passengers buy and carry home from abroad and goods that they send back to China via post. To be more specific, the import duty rate for golf equipment and luxury watches will be raised from 10% to 30% and that for cosmetics will be raised from 20% to 50%.

 

Analysts say that the tax adjustment is aimed to narrow the price difference between imported and domestic goods, and to encourage Chinese customers to buy watches and cosmetics made at home. Experts point out that the new tariff policy will most affect those profiteers who make money by selling foreign goods and tourists who go abroad for buying a large number of luxury foreign goods.

 

Most Chinese customers agree that they can save much money if they buy cosmetics, clothes and watches abroad. In order to take advantage of the price difference, it is very common for Chinese people to ask their friends or relatives to buy luxury goods for them from abroad or they travel abroad to buy these things themselves. Take cosmetics as an example. Value-added tax, import tax, and consumption tax are to be imposed on imported cosmetics before they can be sold in China, and their selling prices are usually high in the market. On April 1, 2006, China started adjust to the consumption tax, with that of high-end cosmetics raised to 30%, and their value-added tax raised to 17%. Allowing for the with related imported tax, the selling price for imported cosmetics in China was at least 60% higher than their related selling prices abroad.