Potential green tax could impose 30 percent levy on cosmetics

By Michelle Yeomans contact

- Last updated on GMT

Potential green tax could impose 30 percent levy on cosmetics

Related tags: Tax

Chinese officials are said to be considering levying a consumption tax on certain consumer products that make heavy use of resources and cause pollution, with cosmetics indicated as potentially being levied anywhere up to 30 percent.

According to a news publication on the region, The China Daily, the country's top legislature, the Ministry of Finance and the Standing Committee of the National People's Congress is making major efforts to promote resource and environmental protection awareness.

A recent report compiled by the legislators ​allegedly states that they are studying the inclusion of products with high resource consumption, those causing environmental pollution, and some high-end consumer goods in items subject to consumption tax.

However, the publication does go on to report that the bodies are also taking into consideration adjusting the tax rate on some consumer products that are "incompatible with the country's consumption level".

Fourteen consumer products currently subject to consumption tax, include cosmetics, cigarettes, alcohol, expensive jewelry, pearls and jade, firecrackers, motorcycles and automobiles.

Although the finance ministry has neither confirmed nor denied media reports on the potential consumption tax, The China Daily reports Ni Hongri, a researcher with the Development Research Center under the State Council, as stating that under the current "structural tax reform​", the "adjustment​" should include both an increase and a decrease.

"For example, cosmetics are subject to a 30 percent consumption tax. But as people's living standards have improved, many cosmetics products have become more widely available, so should be subject to a lower tax​," he reckons.

China previously reported to be lowering taxes for cosmetics

Just less than two years ago, China was reportedly said to be lowering import taxes on a variety of international goods, including cosmetics and personal care items.

At the time, regional publication 'Nanfang Daily newspaper' reported that the lower tax rates were part of a series of tax reductions aimed at bringing China in compliance with international trade agreements.

Much of the double digit growth in the cosmetics sector in China has been attributed to international brands, but many cosmetics are subject to a tax in excess of 50 percent, depending on the type of product and the country of origin.

Related topics: Business & Financial, East Asia, China

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