China tries to rein in rich with supercar tax
Beijing — China is slapping a 10% tax on cars such as the Ferrari GTC4Lusso, Bentley Bentayga and Aston Martin DB9 in a bid to combat conspicuous consumption and to promote more fuel-efficient vehicles.
The tax on vehicles costing 1.3-million yuan ($189,000) or more kicked in on Thursday, according to the ministry of finance. The levy on "superluxury" vehicles was meant to "guide reasonable consumption", lower emissions and save energy, the ministry said.
The tax is China’s latest move to tone down spending by the country’s growing ranks of wealthy consumers. While the additional cost will be a limited deterrent for people willing and able to spend vast sums on a car, it is another drag on these vehicles just as they are showing signs of recovery amid President Xi Jinping’s calls for thriftiness. It also comes as the government considers extending a tax cut on smaller cars due to expire in December.
"The tax increase is a display of the government’s attitude of advocating frugality," said Cui Dongshu, secretary-general of the Passenger Car Association.
"The increase in taxes on luxury cars may help make the extension of the small-car tax cut more likely given it is in line with the government policy of promoting cars with better fuel economy," he said.
Manufacturers of ultraluxury vehicles have been shifting their line-ups in recent years to appeal more to Chinese buyers, who generally prefer large vehicles to sports cars.