China cuts consumption tax on cosmetics to stir growth
- Wall Street set to open higher; Dow to hit record level
- Equinix (EQIX) Announces $3.6B Acquisition of Data Center Portfolio from Verzion (VZ)
- Roper Industries (ROP) to acquire Deltek in $2.8B Deal
- GoDaddy (GDDY) to Acquire Host Europe Group in ~$1.8B Deal
- Pre-Open Stock Movers 12/06: (TXMD) (IL) (GPRO) Higher; (SB) (MIK) (CMG) Lower (more...)
File photo of customers purchasing beauty care products at a cosmetics store in Hong Kong January 21, 2011. REUTERS/Tyrone Siu
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
BEIJING/SHANGHAI (Reuters) - China will reduce or remove consumption tax on all cosmetic products, the finance ministry said on Friday, as the country looks to stimulate domestic spending to help prop up slowing economic growth.
The new policy will see consumption tax - previously set at 30 percent for all cosmetics - waived entirely for non-luxury cosmetic products, while the tax rate on more expensive cosmetics will be cut to 15 percent, the finance ministry said in a statement.
The move, which comes into effect from Oct. 1, fits with China's drive to make products more affordable to domestic shoppers, many of whom have traditionally looked to buy more expensive products overseas because of high tax rates at home.
The cuts could be of some help to imported cosmetics brands, analysts said, but are unlikely to have a major or immediate impact because other steep tariffs mean prices domestically will remain high compared to markets overseas.
"Cosmetic brands could benefit mildly from the tax reduction with more competitive pricing," said Jefferies analyst Jessie Guo in a note on Friday. She added, though, that it would only "moderately" boost domestic demand.
Last year, the ministry slashed import taxes on products from skin care to shoes in a bid to "push forward structural reform" as the country looks to shift its economy to consumption from flagging manufacturing and exports.
The head of the world's largest advertising firm, Martin Sorrell, told Reuters on Thursday the business environment in China was the toughest he had seen in around three decades, especially hitting international brands.
(Reporting by Beijing Monitoring Desk and Adam Jourdan in SHANGHAI; Editing by Jacqueline Wong)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Italy readying state bailout for Monte dei Paschi bank: sources
- Trump says 'cancel order' on too expensive new Air Force One
- Glencore raises money for Kurdish oil deal, likely short of target: sources
Create E-mail Alert Related CategoriesReuters
Related EntitiesJefferies & Co
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!