Real estate, luxury pollutants: new burst of taxes in China

World News

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.