Experts from the Ministry of Commerce and the Ministry of Finance explain the differences in tariffs on high-grade goods

Two weeks ago, the Ministry of Commerce issued news that China’s import tariffs on medium-to-high-end goods will be further reduced. This is a general trend, and various departments have consensus on this. This led to the interpretation of the reduction of luxury goods tariffs. Since then, there have been reports that officials of the Ministry of Finance “had not heard of the need to reduce the import tariffs on medium and high-end goods”. On June 24, the official website of the Ministry of Commerce subsequently published an article quoting an expert's opinion that the tax on the import of goods should be lowered as the people's living standards increase. On June 30, the official website of the Ministry of Finance also published an article saying that the import tax on luxury goods could not be cancelled but it should be further strengthened. How to define high-end goods and luxury goods? How to explain the disagreement between the Ministry of Commerce and the Ministry of Finance? This reporter interviewed Liu Shangxi, deputy director of the Financial Science Research Institute of the Ministry of Finance, and Zhao Ping, deputy director of the Consumer Economics Research Department of the Ministry of Commerce.

How to define luxury goods?

Liu Shangxi: luxury non-required goods Zhao Ping: The concept of luxury goods is a dynamic change***: In the expression, the Ministry of Commerce emphasizes that it is a tax on the import of high-end goods, and the Ministry of Finance’s website uses a luxury tax. Define luxury goods and high-end goods?

Liu Shangxi: There are some differences in the expression of high-end consumer goods and luxury goods. Luxury goods are high-end goods, and mid-range goods are a vague expression. One attribute of a luxury product is a non-essential product. Since it is a non-essential product, it is beyond the actual needs of a person's survival and development. Its symbolic significance and psychological feelings far exceed its practical functions.

For example, some rich people are very rich. He can spend money to buy private jets and spend more than 100,000 to buy a LV bag. This behavior is allowed in a society, but it cannot advocate that people should go for such a life. Some people Without such financial resources, we must also look to this aspect, save food and drink to buy a tens of thousands of brand bags, this is a blind comparison of consumption, this kind of luxury consumption is unhealthy, should not encourage such consumption. There are things in luxury that are unproductive, like tobacco and alcohol.

Zhao Ping: Luxury is a very large range, there is no particular concept. With the improvement of people's living standards, the concept of luxury goods is dynamically changing. For example, we thought that cars were luxury items more than a decade ago, but now cars have become our means of transportation and have become a necessity that ordinary people can afford.

So the concept of luxury goods is a dynamic concept, with the characteristics of the times. We advocate that the taxation of imports can be aimed at those areas that originally belonged to the category of luxury goods, but have now been transformed into consumer goods that are essential for people's lives. For example, some imported cosmetics and imported milk powder. Many children in the middle-income class now drink imported powdered milk. It cannot be said that these are still luxury goods, or that the people are not expected to be consumers.

In foreign countries, milk powder and cosmetics are not luxury goods, but are just the daily necessities of the people.

Lower tariffs affect finances?

Liu Shangxi: Import tax is an important tax source Zhao Ping: It does not mean that fiscal revenue is decreasing. ***: If the tax on imports is cancelled or reduced, what impact will it have on fiscal revenue?

Liu Shangxi: In 2010, the three types of taxes (including tariffs, value-added taxes, and consumption taxes) on imports were 125,127.47 million yuan. These taxes belong to the central tax and are the main source of the central government's expenditure. In 2010, the central government spent 1,589.973 billion yuan. It is not difficult to see from this that the weight of the import tax revenues. If canceled or reduced, it will have a big impact on fiscal revenue. If the import tax is lowered, taxes on the operational aspects of imported goods may increase, but this part of the increase in taxes is far from making up for the reduction in fiscal revenue caused by the reduction or abolition of import taxes.

Under the background of economic globalization, any country has import and export. If it is conducive to the promotion of our country’s interests, it is worthwhile to reduce even more taxes. The export rebate of more than 730 billion yuan in 2010 was mainly based on such considerations.

Zhao Ping: Not reducing the import tax on consumer goods means that fiscal revenue is falling. This is a process of structural adjustment. Taxes in the form of import taxes on medium and high-end consumer goods will be reduced, but taxes in the form of income tax, value-added tax and business tax will increase. This will result in an adjustment of the tax structure, so do not reduce import taxes and fiscal revenues for medium and high-end consumer goods. The decline establishes a direct relationship and cannot statically examine fiscal revenue. The economy is a big loop, and more imports will drive growth in other industries.

High taxes lead to overseas consumption?

Liu Shangxi: Tax reduction may not be able to cut prices Zhao Ping: Tax high is an important reason for overseas consumption ***: Is it because of high import taxes that lead to a large number of shopping trips and overseas purchasing?

Liu Shangxi: Generally, the price of the place of production is lower than the price of the place of sale. Foreign goods are sold to China, and the prices in China are usually higher than foreign prices, including distribution costs, financial costs, transportation costs, storage costs, and so on. In addition, there is a supply-demand relationship. For example, some foreign brands have low awareness in foreign countries and are mid-range goods, but they have high awareness in the country and become high-end products. Domestic buyers compete to chase and prices rise.

For the pursuit of luxury goods, the domestic far better than foreign countries, which also led to the domestic brands of imported luxury goods prices higher than foreign, because the domestic demand is even greater, the price is even higher. Another point is that when Chinese residents go shopping abroad, they can also get export tax rebates, which makes foreign prices even lower than in China. As for the taxation of imports, it is a marginal factor and naturally it will raise prices. But as long as domestic enthusiasm for the pursuit of luxury goods abroad has not diminished, even if the tax cut, or even canceled, the domestic luxury goods prices are difficult to drop down, that is to say, the tax cut does not necessarily reduce prices, it touches on the profit margin of luxury goods operators. enlarged.

Zhao Ping: I think this is a very important reason. Nowadays, all over the world are Chinese people buying middle-to-high-end consumer goods. The reason why the price of foreign consumer goods is cheap is a very important factor. In the domestic pricing of imported consumer goods, the tax on imports is an important factor.

At the same time, Chinese people's overseas purchase of high-end consumer goods is also related to the quantity and type of goods. Because our import tax is set very high, many importers will assess which products the other market does not like, if they do not like it may not come in, so for us to choose the single species in the country is less, many People will go abroad to buy. High import taxes are an important reason for the limited imports.

Some people say that relying on the quality of origin and showing off their psychology is the reason why people buy overseas. I think this is not true. There are fixed distribution channels for imported consumer goods. There is no better quality of origin than the quality of goods imported into China. Many people buy high-end imported consumer goods because they can increase their satisfaction and make themselves more happy.

Of course, with the improvement of people’s living standards, more and more people are traveling abroad, and tourism and shopping are linked. Even if the tax on import links is lowered, some Chinese people will go shopping abroad when traveling, but they will cut back.

The so-called reduction or liberalization of taxes on the import of high-end and middle-grade goods is no different from drinking and quenching thirst. It is contrary to the strategy of expanding domestic demand and changing the mode of economic development.

--- Liu Shangxi, deputy director of the Institute of Fiscal Science of the Ministry of Finance, consumes more imported goods to raise people's standard of living and improve people's livelihood. The happiness index has been raised, which is also one of the important goals of our economic development. In this case, it is necessary to further reduce the import tax... Our thinking and ideas should be changed.

--- Zhao Ping, deputy director of the Consumer Economics Research Department of the Ministry of Commerce of the People's Republic of China, can overseas consumption return?

Liu Shangxi: Tax cuts will boost foreign economy Zhao Ping: The tax cut will attract the return of consumers. ***: Reduce or cancel part of the import tariffs on consumer goods. Can these overseas purchasing powers be transferred to China?

Liu Shangxi: I think it is a big mistake to expand domestic demand by reducing taxes on imports. Imported goods come from foreign brands and are produced by foreign companies. Chinese people buy foreign goods at home or abroad, and they are economically the same. They are driven by the production of foreign goods and foreign economies, and have little positive effect on their economies.

Some people say that because the taxes on imports have caused the prices of imported goods in China to be higher than those in foreign countries, after canceling this part of the tax, everyone would not be able to buy abroad and spend money on the domestic market, which would increase domestic demand. This is wrong. It does not matter where the money is spent. The key is to buy what country's goods.

The meaning of expanding domestic demand is through the expansion of the domestic market and the expansion of consumer demand, so that domestic products can reduce the dependence on foreign demand, that is to say, domestically produced products can be more digested in the domestic market, rather than more. Depends on external demand.

If the tax on imports is reduced, it will have an impact on the domestic market, and will lead more domestic demand abroad, and the degree of foreign dependence will increase.

Zhao Ping: I think the price must have a certain degree of room for decline, but it is impossible to reduce the import tax after the product is equivalent to a discount of 50%. In the process of pricing imported consumer goods, the import tax is an important aspect. Some people say that all profits after the tax on imports have been swallowed up by importers and middlemen. This concern is reasonable, but it is actually not easy to form. After lowering the taxes on imports, importers will increase, and more fierce competition will be formed. In the competitive environment, profits cannot be reduced.

For example, some high-end consumer goods brands are popular consumer goods abroad, but after entering China, they will take the high-end route. If the taxes on import links are lowered, competitors of such brands will come, and international brands can form a domestic market. In a competitive environment, competition will return to its true colors, and the Chinese people will benefit.

I think that after reducing the tax on imports, it will indeed transfer a large part of overseas purchases to China. Many people who have made a special trip to go abroad for shopping or who are shopping abroad just because of price factors will reduce overseas purchases. If at home the imported consumer goods of the same kind can be purchased at a cheaper price, at least more than half of the people will not need to be forced to buy abroad.

Impact on domestic companies?

Liu Shangxi: Tax cuts are no different from drinking wolfberry and quenching thirst Zhao Ping: There is no need to worry about ***: Will the release of import taxes on high-end and high-end consumer goods seriously impact domestic enterprises?

Liu Shangxi: The risk is high. Tax deductions for import luxury goods do not necessarily reduce prices, but for mid-range goods, if tariffs, value-added taxes, and consumption taxes are removed or reduced at the import stage, dumping will occur, because exporting countries generally have a zero tax rate on exports, and domestic Similar goods contain VAT and consumption tax, which will result in unequal tax treatment and will lead to the collapse of a large number of domestic enterprises. Lowering tariffs is a trend, but it does not mean giving up protection. As a developing country, giving up protection equals suicide.

More importantly, this will lead to a failure of the policy of expanding domestic demand. Many domestic enterprises have already formed large production capacity. On the one hand, the products produced cannot be sold, and on the other side, a large number of imported goods are put into unfair competition with domestic similar goods. Nowadays, there are many foreign goods advocating foreign goods, and more people are buying foreign brands, making the already insufficient domestic purchasing power and domestic demand market even more inadequate. In this way, there are only two ways for domestic companies and domestic products: either to seek more exports or to export to the world's low-end markets, or to die.

Therefore, the so-called reduction or liberalization of taxes on the import of middle-to-high-end commodities is no different from drinking and quenching thirst. It is contrary to the strategy of expanding domestic demand and changing the mode of economic development.

Zhao Ping: There is no need to worry about this. Although opening up will have some impact on the domestic market, especially at the beginning of opening up, it will have a certain impact on domestic industries. However, the practice of 30 years of reform and opening up has also proved that many industries in China are constantly enhancing their competitiveness in the process of opening up. Through the technology spillover benefits of product R&D and management technologies, domestic companies are growing in continuous learning and competition.

This is particularly evident in the retail industry. It was originally thought that the Global 500 has come and China's domestic retail industry has completely finished, but in fact there is a "catfish effect" and "technology spillover effect." The reduction of taxes on imports of medium and high-end consumer goods is beneficial to the development of the entire industry.

Of course, it does not rule out that the impact will be greater in individual small areas or regions. However, on the whole, especially in the context of economic globalization, closed doors cannot protect backward companies, and backward protection will only make us more backward.

Protecting enterprises and improving people's livelihood contradiction?

Liu Shangxi: Zhao Ping, who did not open up to import, can improve people's livelihood and promote employment. ***: Is there any contradiction between protecting domestic companies and improving people's living standards?

Liu Shangxi: This is not a contradictory issue. It is a short-term and long-term interest issue. Any country will protect its own economy. If the door is opened because of the cheapness and good quality of foreign countries, then the domestic enterprises will never develop. We must pay attention to the long-term improvement of the people's livelihood. It is not a matter of immediate improvement.

We cannot just see the immediate interests. It can't be said to stop it from opening. What can't stop the reason? Many Chinese people admire foreign goods in terms of consumption. Under such circumstances, should domestic enterprises and high-end brands not continue to develop? Now if it is open, domestic companies will be even weaker and brands will not be built. Chinese goods will always become low-grade goods. How can the competitiveness of the entire country come up?

At present, when China has not yet opened its import of consumer goods, domestic production capacity of consumer goods has relatively increased. Can meet people's daily needs, the same thing domestic quality is also good. Although China's brands are still flawed, they have made great progress. We should continue to support our policies.

Zhao Ping: Lowering the import tax on high-end and high-end consumer goods can improve people's livelihood and raise people's living standards so as to increase the happiness of ordinary people. Why do people feel bad about their happiness? One very important reason is that many domestic consumer goods are more expensive than similar foreign products, and ordinary people feel that they are spending less. In particular, imported goods such as coaches and polo shirts are popular consumer goods abroad. By reducing the import tax to make such goods fade out of the coat of luxury goods and restore them to domestic high-end consumer goods, the happiness of ordinary people will also improve.

After the reduction of import taxes, importers in the domestic market will have more business, and thus absorb more domestic employment. Employment itself can create income and increase value, which is conducive to the growth of China’s GDP, and it also increases various business taxes. , personal income tax, corporate income tax, etc.

Why are there differences?

Liu Shangxi: The perspective of each station is different. Zhao Ping: Ideas should be changed. ***: What are the reasons why all parties have differences on whether the consumption tax on medium and high-grade goods is reduced?

Liu Shangxi: The reasons for differences are because the perspectives of the respective stations are different, the positions are different, and the aspects considered are not the same. According to my understanding, the Ministry of Commerce proposed to reduce or cancel the taxation of import links mainly from the perspective of import and export trade. The Ministry of Commerce is in charge of trade. After the tax reduction, the scale of trade has expanded, and there may be other basis.

I think that we cannot import in the name of people's livelihood. Short-term and special circumstances are acceptable. For example, a certain kind of domestic goods is relatively short-lived through imports, but it cannot be liberalized on a large scale.

Zhao Ping: The reason for disagreement lies in the concept. From the perspective of the transformation of our country’s economic development mode, we have seen the largest drop in import taxes since reform and opening up in the past 30 years. Why? Because in the past we had been pursuing the growth of GDP, industrialization was an important development direction. Therefore, reducing the import tax on energy, raw materials, and commodities, which is conducive to the development of domestic production, this part of the taxation has undergone many reforms. The tax on imports has dropped significantly.

In the past, we have not paid enough attention to domestic consumption. This has a direct bearing on our long-term concept of heavy production and light consumption. It also has a direct bearing on the country's pursuit of rapid economic development over the past 30 years.

However, the objective of the “12th Five-Year Plan” is to transform the mode of economic development and establish a long-term mechanism for expanding consumption. That is to say, the national strategy has actually undergone some adjustments. The growth of GDP is no longer our only goal, improving people’s livelihood and expanding domestic demand. Based on the domestic market, it has become an important part of the economic development approach.

In this case, people also need to change their minds and consume more imported goods in order to raise the standard of living of the people and improve people’s livelihood. The happiness index has been raised. This is one of the important goals of our economic development. Therefore, under such circumstances, it is necessary to further reduce the import tax in order to meet the future development goals. Therefore, our ideas and concepts should be changed.

Golden Cufflink

Silver Knot Cufflinks,Brass Crystal Cufflinks,Andy Warhol Cufflinks

925 Sterling Silver Ring Co., Ltd. , http://www.sterling-silverring.com

Posted on