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China Introduces 10% Tax Increase on 'Super Cars'

By | Dec 01, 2016 09:59 AM EST
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The Ministry of Finance has introduced a 10% tax law for luxury vehicles that is to take effect on Thursday.

The Ministry of Finance has introduced a 10% tax law for luxury vehicles that is to take effect on Thursday.(Photo : Getty Images)

China has introduced on Thursday an added 10 percent tax on 'super cars' that cost more than 1.3 million yuan ($189,000) in a bid to curb the expensive lifestyle of high-end community and to control pollution, according to the ministry of finance.

"In order to guide rational consumption, and promote energy-saving emission reductions, the state council has approved an additional consumption levy on ultra-luxury cars," the ministry said in a statement quoted by BBC.

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This is the latest move under President Xi Jinping's government to curb corruption in the world's second economic powerhouse. President Xi has strongly opposed extravagant ways of life, explaining that it triggers graft in China.

Reuters reported that carmakers including Daimler, BMW, and Audi are affected of the new tax laws.

Luxury automakers, however, remain optimistic. They believe that although the new laws will interfere with their operations, they will not have so much effect on their sales in the country.

"We are still evaluating to see what impact this might have on our business," a BMW spokesperson based in Beijing said, noting that a great number of vehicles that were shipped to China were valued at less than the price that was quoted by the government.

On the other hand, a statement issued by Audi said that the new tax laws presented would have a limited effect simply because it was targeting not just them but also other supercar manufacturing companies.

 

 

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