According to media reports, China may cut import duty and consumption tax on several products including cosmetics, gold, jewellery and milk powder.

Chinese authorities have explained that the high level of taxation is encouraging what they called “unusual import methods”. These import methods include on-line and individual travel purchases that would have totalled about US$1.8 billion last year. Officials are concerned that such could result in the loss of several billion yuans in tax revenue each year.

The authorities of the People’s Republic of China think that tariff and tax cuts would encourage usual import procedures, while trimming prices of imported products and encouraging domestic consumption.

Perfumes, cosmetics and toiletries imported into China are currently submitted to duties of about 10% (in theory, depending on the country of origin and the product category, these duties can reach 150%) and to a Value Added Tax (VAT) of 17% of the duty paid value.

Last month, China decrease import tax on computers, video, digital cameras and other IT products from 20 percent to 10 percent.