China will raise the consumption tax on luxury cars worth above 1.3 million yuan (about US$190,000) starting from Dec. 1, 2016, according to a notice published on the website of the Ministry of Finance on Nov. 30, 2016. In the retail sales link, an additional tax of 10 percent will be levied on luxury car dealers on the basis of the current consumption tax. Cars worth above 1.3 million yuan sold in China are mainly high-performance racing cars, full-size sedans, and full-size sport utility vehicles (SUV). According to the ministry, the new tax is meant to guide reasonable consumption, lower emissions and save energy. China started to collect the consumption tax in 1994 on the transaction of designated consumer goods, including automobiles, in order to guide consumption.

A man looks at an Aston Martin sports car in Hangzhou, capital city of Zhejiang Province, on Dec. 1, 2016. [Photo by Long Wei/China.com.cn]

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