SHANGHAI Dec 1 China will impose an extra 10
percent tax on high-end cars in a bid to rein in lavish spending
and to reduce emissions, the ministry of finance has said, a
potential headache for luxury car makers.
The new tax rate will affect cars costing 1.3 million yuan
($188,852) and above, the ministry said in a statement late on
Wednesday, which could impact high-end luxury brands such as
Ferrari, Aston Martin and Rolls-Royce.
China, spearheaded by President Xi Jinping, has been
cracking down on ostentatious shows of wealth over the past few
years, a drive that has hit domestic luxury sales from premium
spirits to handbags.
The latest move, which comes into effect from Thursday, will
likely only be a small deterrent to wealthy car buyers already
willing to open their wallets, but does signal a tighter stance
by Beijing on high-end luxury in the sector.
($1 = 6.8837 Chinese yuan renminbi)
(Reporting by Adam Jourdan; Editing by Paul Tait)