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China Briefing is a monthly magazine and daily news service about doing business in China. We cover topics relating to the Chinese economy, the market in China, foreign direct investment and Chinese law and tax. It is written in-house by the foreign investment professionals at Dezan Shira & Associates

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Higher Tobacco Taxes Imposed

Posted on June 22, 2009 by China Briefing

Jun. 22 – China’s Ministry of Finance and the State Administration of Taxation (SAT) has announced higher taxes on tobacco products to increase state revenue.

Cigarette cartons that cost RMB70 or more will be taxed from 45 percent to 56 percent while cartons costing less than below RMB70 will be taxed from 30 percent to 36 percent reports Xinhua.

“The move aims to moderately increase financial revenue, and perfect the taxation mechanism”, the agency said in a statement.

A 5 percent advalorem tax was also introduced on tobacco products for the first time. The tax is based on the real value of the product and not on quantity.