China will impose an extra 10 percent tax on high-end cars in a bid to rein in lavish spending and to reduce emissions, the Ministry of Finance has said, a potential headache for luxury car makers.
The new tax rate will affect cars costing 1.3 million yuan ($188,852) and above, the ministry said late Wednesday, which could affect sales of high-end luxury brands such as Ferrari, Aston Martin and Rolls-Royce.
China, spearheaded by President Xi Jinping, has been cracking down on ostentatious displays of wealth over the past few years, a drive that has hit sales of such items as premium spirits and handbags.
The latest move, which goes into effect Thursday, will most likely be only a small deterrent to wealthy car buyers already willing to open their wallets, but it does signal a tighter stance by Beijing on high-end luxury in the sector.
