The Chinese government will reduce taxes on imports to boost domestic demand.
China thus intends to promote a restructuring towards an economy more based on domestic consumption and less on investment, says the Chinese State Council (Executive) in a statement issued by the official Xinhua news agency after a meeting chaired by the Premier, Li Keqiang.
Among the measures adopted, the tax on imports of goods in high demand by the Chinese market will be lowered, which will be adopted before June and is expected to be extended later. Taxes on the purchase of clothing and cosmetic products will also be lowered.
In addition, “unreasonable” import tariffs will be removed from customs inspections and these controls will be promoted to facilitate imports.
The number of duty free stores at airports and other ports of entry into China will be increased, as well as the variety of products sold there.
The Chinese government will also encourage the establishment of more stores and exchanges between virtual and physical stores.
Domestic taxes on rare earths
In addition, the State Council decided to revise domestic taxes on rare earths, tungsten and molybdenum, essential raw materials in the manufacture of technological products, to be based on prices rather than quantity purchased.
After eliminating export taxes on these materials last week, the Chinese government now intends to reduce the tax burden for domestic firms that use them and also prohibited local governments from creating new taxes.
Fuel modernization plan
The Chinese government will also launch a plan to accelerate the modernization of the fuels used in the Asian giant and extend them beyond the main cities where they are currently used.
The plan will introduce in 2016 the mandatory consumption of gasoline and diesel of the so-called “fifth generation”, with sulfur emissions of 10 parts per million, in the eleven provinces of eastern China and in 2017, in the whole country.
On the other hand, the Chinese Ministry of Finance urged local administrations to deepen fiscal reforms, reduce administrative hurdles and spend unused tax funds.
Original source: “China to lower import taxes to boost consumption” by Aral IT via Expansión.