China may tax more luxury goods, expand property tax

China may tax more luxury goods, expand property tax
Chinese Minister of Finance Lou Jiwei speaks during a briefing at the US Department of the Treasury July 11, 2013.

BEIJING - China plans to levy consumption taxes on more luxury goods and may expand a pilot property tax beyond its current testbeds of Shanghai and Chongqing as it pushes ahead plans to reform the world's second-largest economy.

The official Xinhua news agency also cited Finance Minister Lou Jiwei as saying on Wednesday that China would levy consumption tax on goods that cause severe environmental pollution and over-exploitation of resources.

Lou made the remarks during a once-in-two-months session of the standing committee of the National People's Congress, China's parliament.

China's leaders have pushed a strong reform line as the plank of their economic policy, looking to reshape the economy to one driven more by consumers than exports, big industries and credit.

The ruling party will hold a key meeting in November that will set the country's economic agenda for the next decade, with tax reform likely to be a priority.

There has been much talk about widening use of property taxes as China's home prices keep rising, and cities where it might be imposed include Beijing, Hangzhou, Shenzhen, Qingdao and Wuhan. The tax is currently levied on owners of spacious and expensive homes in Shanghai and Chongqing.

Extending tax on luxury goods would also fit into the government's drive to discourage ostentation, itself a goal that is linked to a broader attack on corruption.

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