China slaps Ferrari and other ‘ultra premium’ vehicles above 1.3m yuan with new 10pc levy
China has imposed an additional 10 per cent tax on “ultra premium cars” costing over 1.3 million yuan in the latest attempt to crack down ostentatious spending and emissions, authorities said.
The new levy, affecting super luxury car brands such as Ferrari, Bentley, Aston Martin and Maserati, has come into effect since Thursday, and was designed to “guide rational consumption,” according to a statement by the Ministry of Finance.
Ahead of the implementation of the tax on Wednesday evening, luxury car dealers in China went on marketing blitz, selling the equivalent of three month’s stock in a single evening as buyers rushed to beat the midnight deadline, Bloomberg reported.
The move is part of Beijing’s wide-reaching campaign against conspicuous luxury consumption and flashy displays of wealth since President Xi Jinping rolled out a graft crackdown that called for thrift of the country’s political elite in 2013.
“To guide rational consumption and curb emissions, the State Council has given a green light to an additional purchase tax on ultra premium vehicles,” the statement said.
Beijing has already introduced a 25 per cent tax on imported vehicles shipped to China, but that has not deterred the country’s newly wealthy.
China has become one of the world’s largest consumers of top-end sedans, prompting Western brands like Lamborghini and Porsche to showcase high-end offerings. Other brands like Aston Martin were rolling out SUV models -- traditionally a darling among Chinese consumers who favour spacious vehicles.
Last year, Porsche sales in China surged 24 per cent to 58,009, making the country its largest single market.
Xi’s anti-corruption campaign, which shows no signs of abating, has taken a heavy toll on global luxury brands, including watchmakers such as Rolex and jewellers such as Chow Tai Fook.