China slaps new 10% tax on super-luxury cars

China slaps new 10% tax on super-luxury cars

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PRI ECO ESPL INT
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China slaps new 10% tax on super-luxury cars
Beijing, Dec 1 (AFP) China has imposed an extra 10 per cent tax on ultra-high-end cars costing over 1.3 million yuan (USD 190,000), the government said, the latest step in a wide crackdown on conspicuous luxury consumption.
Under President Xi Jinping the Communist Party has overseen a sprawling campaign against graft and encouraged thrift among the country’s political and economic elites, targeting showy displays of wealth.
The new tax took effect today and was intended to “guide rational consumption” and promote energy-efficient vehicles, the finance ministry said in a statement late yesterday.
China already taxes imported vehicles at a high rate, slapping a 25 per cent tax on all foreign cars shipped to China.
The extra charge will likely hit brands such as Ferrari, Rolls-Royce, and Lamborghini, as well as top-end offerings of Mercedes and BMW.
Ferrari sales in China surged 26 per cent in the second quarter of this year, with 160 units delivered.
Luxury carmakers have seen massive growth in China, the world’s largest auto market, despite the anti-corruption campaign.
Passenger vehicle sales in China surged by an average of more than 12 per cent annually from 2010 to 2015, but an economic slowdown has reduced the speed, with expansion dropping to 4.7 per cent last year with total sales of 24.6 million. (AFP)
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