Under a new rule effective on 1 August, duties on luxury consumer goods, including brandname watches and cosmetics, carried by mainlanders into the country from abroad are raised by 10% to 30%.

The new version of the tariff schedule for articles carried by in-bound travellers and personal parcels entering the country by mail took effect on 1 August. The new tariff schedule has further classified consumer goods and revised tariff rates from three levels to four, i.e. 10%, 20%, 30% and 50%. Levies on cosmetics have been raised to 50%.

According to a Guangzhou customs official, luxury consumer goods are hardest hit by the rates adjustment. Tariffs on cosmetics have jumped from 20% to 50%. Tax rates on golf balls and golf clubs have also increased from 10% to 30%. Levies on luxury watches with a dutiable price of Rmb10,000 and above have been raised from 20% to 30%.

According to a mainland resident who regularly travels to Hong Kong to buy cosmetics, for a bottle of perfume costing Rmb200, the tax paid in the past was only Rmb40. But now the tax has gone up to Rmb100, which is indeed very high. However, since one can only be sure of getting authentic products in Hong Kong for certain items, the money is worth spending. Another mainland resident said that since Chinese customs are not very strict in their law enforcement, the chances of being singled out for random check are not high.

While raising the import duties on luxury items, China has lowered the assessed value of home electrical appliances and digital products. Import duties on these items carried into the country are quite low by comparison. For example, an LCD monitor under 17 inches was taxed Rmb3,000 in the past, but now the tax has been revised to Rmb1,000 for LCD monitors under 19 inches. According to mainland customs officials, this is because China already has a leading edge in the production of this type of products and the relaxation of import tariffs will not only stimulate relevant domestic industries but is in line with China¡¦s WTO commitments.

Apart from the adjustment of tax rates, the new tariff schedule also covers a wider range of articles. This means more import items are now taxable. These include new electronic products such as PDA, MP3 and MP4.