China Raises Consumption Tax Rates on Cigarettes

Source from:  Icxo.com 06/02/2009

The Chinese Ministry of Finance and the State Administration of Taxation, with the approval of the State Council, have jointly issued the Notice on Changing the Policy on Consumption Tax on Cigarette Products (Official Document No. 84 of 2009 on Finance and Taxation), in efforts to increase government financial revenues and improve the system of taxation on tobacco products. The official document provides that the ad valorem consumption tax rate on Grade One cigarettes will change to 56 percent from the previous level of 45 percent, Grade Two cigarettes to 30 percent from the previous level of 45 percent, and cigars to 36 percent from the previous level of 25 percent. Besides, an additional 5 percent ad valorem consumption tax will be levied on cigarette products at the process of wholesale, the official document says. Namely, for any institutions and individuals operating the business of cigarette wholesale in the People's Republic of China, they will all be liable to pay consumption tax at a rate of 5 percent (excluding Value-Added Tax) on all brands and specifications of cigarettes they are trading at the process of wholesale, according to the official document. Enditem