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Yesterday, the Ministry of Finance issued a notice stating that starting from June 6, my country will reduce the import tariff rate of certain consumer goods such as clothing, footwear, skin care products, and diapers, by an average of more than 1%. This is less than a month after the State Council executive meeting on April 50 proposed to adjust taxation to boost consumption. This speed is really hard.
In the context of China’s outbound consumption exceeding one trillion last year, some commentators believe that lowering tariffs, adjusting consumption taxes, opening more duty-free shops, and developing cross-border e-commerce through free trade zones are all important means to keep consumption behind. How much benefits can these measures bring to the people?
Large range: a substantial reduction in tariffs on a variety of daily consumer goods
In this adjustment, the import tariffs on suits and fur clothing will be reduced from 14-23% to 7-10%, the import tariffs on boots and sports shoes will be reduced from 22-24% to 12%, and the import tariffs on diapers will be reduced. Reduce from 7.5% to 2%, and import tariffs on skin care products from 5% to 2%. These things are daily consumer goods and are closely related to the lives of ordinary people. The tax cuts are really not small, with an average drop of over XNUMX%.
In addition to the products that have implemented low tariffs to promote consumption and improve people’s livelihood in the past few years, China has reduced imports of various daily consumer goods such as clothing, footwear, skin care products, baby food and supplies, kitchen cooking utensils, tableware, spectacle lenses, etc. tariff. Since my country's accession to the World Trade Organization, the overall level of tariffs has continued to decline. In 2012 and 2013, my country also significantly reduced tariffs twice. The items involved include special formula infant milk powder, skin care products, and cardiac pacemakers.
Fast speed: the executive meeting of the State Council will drop in less than a month
The reason for this tax reduction was an executive meeting of the State Council on April 4. The meeting pointed out that expanding domestic consumer demand is an important measure to stabilize growth and adjust structure. Focusing on meeting the requirements of consumption upgrades, by improving tax regulation and other policies, creating a fair and competitive import and export environment, and increasing the import of consumer goods with a strong willingness to buy, will help expand domestic demand, ensure employment, and benefit people's livelihood. It was determined at the meeting that relevant departments should promptly come up with specific plans on the basis of scientific evaluation. First, some foreign daily consumer products that have high demand for domestic consumers will carry out trials to reduce import tariffs before the end of June this year, and gradually expand the scope of tariff reduction products. The second is to combine the reform of the tax system, improve the consumption tax policy for mass consumer goods such as clothing and cosmetics, and coordinate the adjustment of the scope of taxation, tax rate and collection links. The third is to increase and restore port entry duty-free shops, reasonably expand the types of duty-free, increase a certain amount of duty-free shopping, and facilitate domestic consumers to buy foreign products in China.
At that time, the meeting made it clear that the trial of import tariff reduction was launched before the end of June. In less than a month, the Ministry of Finance decisively directly reduced taxes to cover a variety of daily consumer goods. The implementation speed was indeed relatively fast and deserves praise.
There is room: the reduction of daily necessities consumption tax is more worth looking forward to
In addition to lowering tariffs, the meeting also left a lot of room for tax reductions, that is, the second consumption tax issue. Consumption tax is an indirect tax, which is directly included in the price of goods. Our country’s current commodity prices will not clearly indicate the amount of consumption tax, but in some countries, the price of goods will directly indicate the amount of consumption tax. I don't know, in fact, the consumption tax of many commodities in our country is not low. Compared with lowering tariffs, the adjustment of consumption tax has a greater impact on domestic consumption.
Many women like to buy cosmetics when they go abroad. Taking imported cosmetics as an example, the tariff rate is 10%, while the consumption tax rate is 30%. In addition to 17% value-added tax, the three add up to 57%. This is internationally Belong to the upper middle level. Some experts believe that for some ordinary consumer products, the consumption tax rate can even be reduced to zero.
Wang Weiqing, head of the taxation teaching and research group of the Overseas Education College of Shanghai Jiaotong University, said that the objects of consumption tax are constantly changing. Skin care products in cosmetics were originally considered as luxury consumption. With the development of economy and society, skin care products have become ordinary. The necessities of the citizens, especially the middle class, belong to civilian consumption. It is very necessary to adjust the consumption tax on skin care products in due course.
Judging from the spirit of the executive meeting of the State Council, although it is said that it is an adjustment of consumption tax, it is not said that it is a tax reduction, but from the perspective of stimulating consumption, it is more likely to be reduced. Now that the tariffs have been reduced so decisively, I also hope that the consumption tax can be adjusted as soon as possible. However, what should be lowered will be lower, and what should be raised must be higher. On May 5, the Ministry of Finance and the State Administration of Taxation jointly raised the tobacco consumption tax.
Will expand: add port entry duty-free shops in regional central cities or early adopters
In addition to tax reduction + tax adjustment, the State Council executive meeting on April 4 also pointed out that my country will increase and restore port entry duty-free shops, reasonably expand tax-free varieties, and increase a certain amount of tax-free shopping.
In recent years, duty-free shopping has been welcomed by many domestic tourists. Take Hainan’s outlying island duty-free shopping as an example. When it was first implemented in 2011, due to factors such as insufficient tax-free varieties and tight limits on hot-selling products, the full release of tourists’ shopping demand was restricted.
In 2012 and this year, the policy has been adjusted twice. The current consumption quota has been increased from 5000 yuan to 8000 yuan, the number of product categories has increased to 38, and the number of single purchases of hot-selling products has been relaxed. According to customs statistics, as of April this year, the sales of duty-free shops in Sanya and Haikou reached 4 billion yuan.
In addition to Hainan, duty-free shops in international airports in major cities are also good places to buy duty-free goods. However, most port duty-free shops are concentrated in the exit link, and there are few inbound duty-free shops, mainly in Beijing, Shanghai and other places, and there are fewer varieties.
In the future, it is expected that the number of domestic duty-free shops will increase, expanding from first-tier cities such as Beijing and Shanghai to regional central cities. With the expansion of the Shanghai Free Trade Zone and the establishment of the Fujian, Guangdong and Tianjin Free Trade Zones, some duty-free shops have also entered the free trade zone, which can facilitate the public to buy imported goods with lower tax rates.
More affordable: tax adjustments and price cuts make some international brands cheaper
For a long time, the large difference in domestic and foreign prices of some commodities is considered to be the main reason for the consumption outflow. According to Gao Hucheng, Minister of Commerce, at this year's two sessions, last year, the number of people leaving China exceeded 1 million and overseas consumption exceeded RMB 1 trillion. As small as toilet lids and milk powder, as large as yachts and real estate, Chinese people consume a lot of food, clothing, and housing overseas.
So, if the government cuts tariffs and adjusts consumption tax, will it really lead to a drop in the price of imported goods? Will it really bring consumption back? In fact, taxation is only one reason why the price of domestic imported goods is higher than that of foreign countries. There are also many factors such as logistics costs and house rents. In addition, this is also related to the pricing strategies of some merchants. Due to strong demand, the pricing of many international brands in China is significantly higher than that of countries such as Europe and Japan.
But in any case, lowering tariffs and adjusting consumption taxes will help lower prices. In addition, as domestic consumption becomes more rational and some abnormal consumption is regulated, the domestic sales of many international brands, especially luxury goods, have also declined, which is also an important reason for forcing them to cut prices. For example, Chanel, due to the continuous decline in sales in the past two years, began to lower its pricing in China at the end of last year, basically the same as in Europe, which is equivalent to a XNUMX% discount on the original price. In this way, coupled with the tax adjustment, it will benefit the common people a lot, and this can be regarded as a big red envelope for consumption by the government.
Article reprinted from CCTV News, Xinhua Net, China Government Net
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