China to levy tax on luxury goods
China to impose a new consumption tax on various luxury goods especially wooden based items.Updated: Mar 22, 2006 12:16 IST
China will impose a new consumption tax on disposable wooden chopsticks, wooden floor panels, yachts, luxury watches and oil-based products from April 1 in a bid to reduce the rich-poor divide and to protect the environment.
The Ministry of Finance said the plan has been approved by the government and was designed to control and regulate energy consumption, help protect the environment by reducing consumption of timber resources, and narrow the rich-poor gap.
China will collect a five per cent consumption tax on disposable wooden chopsticks in a bid to discourage their use, as they are a waste of timber resources, the ministry said.
The production of disposable chopsticks uses up China's forests at a rate of 1.3 million cubic metres of timber or two million cubic metres of wood each year, it said.
China sells 10 million boxes of wooden chopsticks domestically and exports about six million boxes each year, which amounts to 15 billion pairs of chopsticks, according to the statement.
China will also impose a five per cent tax on wooden floor panels, a 10 per cent tax on yachts, golf balls and golf clubs, and a 20 per cent tax on luxury watches, it said.
A consumption tax on naphtha, solvent, lubricant at a rate of 0.2 yuan per litre, and 0.1 yuan per litre for aviation fuel oil will also be charged, the ministry said.
First Published: Mar 22, 2006 12:16 IST