New duty levied on luxuries
By Jiang Jingjing (China Daily)Updated: 2006-12-28 09:51 Although Chinese travellers must pay at least 20 per cent more for duties on watches and cosmetics purchased from overseas markets, it is still much cheaper than buying them from local shops.
The Ministry of Finance announced on Tuesday that starting from the beginning
of next year it will raise the tariff on individual travellers' purchases of luxury goods
from overseas nations and regions. The tariff on golf clubs and relevant
equipment and luxury watches will increase from the current 10 per cent to 30
per cent, and the cosmetics tariff will jump from 20 to 50 per cent.
 Cosmetics on display at a department store in Nanjing, the capital of East China's Jiangsu Province. [China Daily]  |
Experts say the increased tariffs will not undermine local customers' desire to shop abroad, since those luxury goods are still cheaper in foreign markets than those sold in the domestic market, even after the imposition of the new duty rate.
"Mainlanders will still find it less expensive to fly to Hong Kong, stay in a five-star hotel and bring back a 20,000 yuan (US$2,564) watch than to buy it from a boutique in Beijing," said Liu Xingli, editor of Trendstime.
"Domestic prices, with the combination of tariff, value-added tax and
consumption tax, are not as competitive as those in Hong Kong and foreign
marketplaces."
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