China has introduced a new taxation system which is aimed at reining in the rapidly escalating demand for luxury goods.

The world's fastest growing market has blossomed in the last decade, as an increasingly large affluent middle class has been able to spend disposable income on a range of goods.

Jewellery, expensive cars and other high-end items have benefited from the move, but now the Chinese authorities are looking to cash in on the consumer boom.

To that extent China has said it will raise taxes on large cars – with those vehicles with an engine over two litres set to face a hike form eight per cent to 20 per cent – while a number of other sectors are also affected.

Yachts and golf balls will all be hit with a ten per cent tax in a clear sign of the wealthy individuals at which the policy is aimed, while luxury watches will be it with a 20 per cent levy.

The move is part of the efforts by China's ruling communist government to redress the yawning gap between the rich and the poor in the country, with the growth of the affluent class being matched by widespread poverty in rural regions.


Ÿ Adfero Ltd