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Business / Policy Watch

China's import tax cut to reduce revenue, aid consumption

(Xinhua) Updated: 2015-05-30 14:33

BEIJING - China's latest cuts to import duties will reduce fiscal revenue while boosting domestic consumption, said vice finance minister Shi Yaobin on Friday at a press conference.

The Ministry of Finance (MOF) announced on Monday that China will cut import taxes on clothing, cosmetics and some other goods from June 1.

The MOF said that it will slash duty by half, on average, on suits, fur garments and shoes. A tariff on cosmetics will fall to 2 percent from 5 percent, while a duty on diapers will decline to 2 percent from 7.5 percent.

There is no doubt that the cuts will reduce fiscal revenue, said Shi, while declining to give an exact amount, but he did not expect revenue to decrease too much given that more imported goods mean more import tax revenue.

With strong purchasing power, Chinese mainland travelers often buy goods as diverse as diapers and handbags abroad to avoid import and consumer taxes back home. Mainland tourists abroad spent $165 billion in 2014, up from $129 billion in 2013.

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