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World

China hikes 'super car' tax in luxury crackdown

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World

China hikes 'super car' tax in luxury crackdown

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COMING UP:China hikes 'super car' tax in luxury crackdown

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00:00:01
>> China's putting the clamp on luxury wheels, officials slapping an extra 10% sales tax on supercars worth more than $190,000 effective immediately. The new law is designed to cut air pollution, but more importantly, to further President Xi Jinping's war on lavish spending linked to corruption. It may seem like a pretty steep increase, but senior Shanghai correspondent Adam Jordan says, China's mega-rich can take the hit.
00:00:27
>> What we've seen here is basically a 10% tax hike on so called supercars. That means your really high end BMWs, Audis, or Mercedes, as well as your flashy Ferraris, Lamborghinis, Bentleys, that sort of car, that is bought by China's super rich. Given the cost of them already is so high, it seems that maybe a 10% extra boost for these high net worth individuals would probably be just a drop in the ocean.
00:00:56
>> The good news for top of the range car makers, they've now got a better chance of slipping under the price threshold indulging the new tax. Possibly because they are making people pay to much for luxury cars to begin with.>> There has been pressure from China, from consumer here, who say that some brands have been charging Chinese buyers more than they would pay overseas in Europe or the US.
00:01:18
And so those prices have been coming down naturally. What that might mean is that some of these cars that would have previously been above that threshold are maybe a bit below it, and therefore will escape any extra tax hike.>> China isn't only targeting cars in the latest anti-corruption drive, under the new rules, senior officials must cut staff, take fewer holidays, and travel, in the words of the government, without pomp.