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China hikes 'super car' tax in luxury crackdown

Friday, December 02, 2016 - 01:28

China imposes an extra 10 percent tax on super-luxury cars in a bid to rein in lavish spending and reduce emissions. David Pollard reports.

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China is putting the clamp on luxury wheels. Officials slapping an extra 10 percent sales tax on supercars worth more than 190-thousand dollars - effective immediately. The new law's designed to cut air pollution - -but more importantly, to further President Xi's war on lavish spending linked to corruption. It may seem like a pretty steep increase... (SOUNDBITE) (English) ASIA PACIFIC MANAGING DIRECTOR FOR IHS AUTOMOTIVE, JAMES CHAO, SAYING: "It's a message. It's a message to the wealthy, it's a message to perhaps government officials who have been misusing funds that they are being watched." The good news for top-of-the-range car makers - they've now got a better chance of slipping under the price threshold and dodging the new tax. Possibly because they were making people pay too much for luxury cars to begin with. (SOUNDBITE) (English) ASIA PACIFIC MANAGING DIRECTOR FOR IHS AUTOMOTIVE, JAMES CHAO, SAYING: "I don't think the effects of this will be noticeable. Maybe with certain manufacturers but the effects, I think, still will be minimal. And the reason why is that the individuals who purchase these vehicles at this price range, a 10 percent increase, will be unnoticeable." China isn't only to target cars in the latest anti-corruption drive. Under the new rules, senior officials must cut staff, and take fewer holidays. And they must travel - in the words of the government - "without pomp."

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China hikes 'super car' tax in luxury crackdown

Friday, December 02, 2016 - 01:28