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Rapid growth of consumption tax in Dalian

Rapid growth of consumption tax in Dalian

Write: Stefanos [2011-05-20]

Data shows that Dalian s domestic consumption tax increased rapidly in 2010, reaching 15.31 billion yuan, up 16%; its domestic consumption tax revenue accounted for 32% of 47.7 billion yuan, the total state tax revenue of the same period. Dalian s consumption tax items were mainly oil, wholesale tobacco, alcohol and expensive jewelry, with tax revenue of 14.9 billion yuan, 250 million yuan, 117 million yuan and 34.83 million yuan respectively, an increase of 15.4%, 95.8%, -5.4% and 17%.
According to a person-in-charge from Dalian SAT, there are 62 taxpayers in all for oil consumption tax and the tax resources are mainly two large refineries: PetroChina Dalian Petrochemical Company and West Pacific Petrochemical, barometers of Dalian s taxation, accounting for over 97% of the total revenue. The recovery in the macroeconomic environment domestically and internationally in 2010, the rationalfluctuation of the international crude oil prices in the 70-95 dollar range, and the price rises the NDRC increased played a key role in maintaining the stable production, income and profits of the two taxpayers, so that they created new highs in oil consumption tax with an accumulation amount of 14.9 billion yuan, an increase of 15.6%.
In order to improve the consumption tax system for tobacco products and to appropriately increase the fiscal revenue of the central government, China, from May 1, 2009, started to levy an ad valorem tax with 5% as its applicable tax rate for wholesale cigarettes, which, for the first time, brought tobacco consumption tax into Dalian, a city with no cigarette manufacturers. With this new tax levy, in the first full year of 2010, Dalian s tax on wholesale tobacco accumulated 249 million yuan, 96% more than the 127 million last year; and monthly revenue average was 20.75 million yuan, an increase of 14.4% over the 18.14 million in the previous year, making tobacco wholesale the second largest tax item following oil consumption tax revenue in terms of accumulated amount.
Since last year, due to the depreciation of U.S. dollar in the international market, gold prices soared; domestic CPI recorded new highs and the stock market turmoil; due to a series of state s controls over the real estate, investment demand for precious jewelry rapidly grew to lead to rises of both price and quantity, driving rapid growth in the consumption tax on precious jewelry. In 2010, Dalian s taxable retail sales of precious jewelry reached 810 million yuan and the paid consumption tax 34.83 million yuan, an increase of 17%.
Unlike in the past, Dalian s wine consumption tax in 2010 moved slightly downward, with an annual total of 117 million yuan, a decrease of 6.42 million yuan. According to relevant persons from Dalian SAT, there might be two main reasons: first, severe market competition in other cities reduced Dalian s overall beer sales; second, the quiet changes of the beer consumption tax structure that Dalian people demanded for fine beer owing to their better living standards brought about less beer income even thought the tax rate for fine beer is higher.

From: Dalian SAT