A new regulation reportedly aimed at keeping wealth at home by levying higher import duties on imported luxury goods such as cosmetic products went into effect Sunday.

According to the new regulation by the General Administration of Customs, the average tax rates remain unchanged for the majority of goods such as cosmetics, handbags and footwear products, but their dutiable value has been increased substantially.

The dutiable value is a base for setting import duties, and a higher dutiable value amounts to more duties even if the tax rates remain unchanged.

For instance, the existing tariff rate of 50 percent for cosmetic products remains unchanged.

However, the dutiable value of imported perfume has been tripled and the dutiable value of a bottle of eye-care has been doubled under the new regulation.

A bottle of imported perfume originally priced at about 100 yuan is now set at a dutiable value of 300 yuan. Therefore, the import duty would now be 150 yuan instead of 50 yuan under the old rule.

But the new regulation also stipulates tax cuts on electronics and video products and cameras, and some of them even enjoy cuts in both tax rate and dutiable value. Previously, a laptop priced at 5,000 yuan was subject to 20 percent tax, but its dutiable value is set at 2,000 yuan and is subject to 10 percent tax rate, saving buyers 800 yuan on import duties.

Goods for personal use worth 5,000 yuan or less are still exempt from import taxes.

An increasing number of Chinese people are buying foreign luxury goods as their wallets get fatter.

China has become the world's largest consumer of luxury goods, according to the World Luxury Association's report 2012. And as the country sets relatively high tariffs on foreign luxury brands, a new niche market of agents for overseas purchasing has become very popular in recent years to evade customs duties. This niche market will reportedly reach 48 billion yuan this year, four times the volume two years ago.

Source:chinesestock