China levies consumption tax on batteries, paint

China announced on Tuesday that it will impose consumption tax on some types of batteries and paint to encourage environmental protection.

A four-percent tax will be levied on the production, processing and import of batteries and coating from Feb. 1, according to an online statement by the Ministry of Finance (MOF).

But cleaner batteries including mercury-free, nickel-hydrogen, lithium and solar cell varieties will be exempted and taxation on lead storage batteries will be postponed till Jan. 1, 2016.

Coating that contains volatile organic compounds of less than 420 grams per liter will also be excluded from the list, the statement said.

China firstly imposed consumption tax in 1994, on consumer goods with a high energy cost and high pollution, to promote a sustainable economic growth model.

Jia Kang, head of the Research Institute for Fiscal Science under the MOF, said China would impose consumption tax on merchandise including luxury products such as private jets and yachts in the future.

Consumer goods including cigarettes, alcohol, cosmetics and jewelry are currently subject to consumption tax in China. Endi