China slaps on 10% Supercar Tax; Philippines going in the same direction
Life is getting that little bit harder for Chinese squillionaires after the Government there announced a new tax on cars costing more US$189,000 (1.3 million in Yuan). Super luxury brands, such as Rolls-Royce and Ferrari, will of course bear the brunt of the new tax as all of their vehicles will set you back considerably more than that, whilst the more mainstream brands, such as BMW and Mercedes, will only be affected in part with just a few of their models costing that.
This move is in line with President Xi Jinping’s directive to cut back the obvious levels of conspicuous consumption in the country amongst the wealthiest comrades, although the Finance Ministry labelled it as an attempt to cut down in emissions and guide reasonable consumption.
Of course the Chinese population are famous for being super flashy and this may just become the catalyst to drive sales upward as the super wealthy vie to have the most expensive toys in their garages. Nevertheless, according to Bloomberg, the announcement spurred a massive increase in interest in supercars in the hours prior to the tax being introduced. The Chinese Automobile Dealers Association claimed that many dealers sold as many high-end models in the hours before the introduction as they would expect to sell in a normal quarter of business.
The Chinese market has become renowned for expensive cars that cost more than double for the equivalent model in the US of A. However, its close neighbour across the South China Sea is less known for expensive cars, but famous for gridlocked roads in its capital of Manila in the Philippines. President Duterte, the man who has become infamous for his brutal war on drugs, has announced that there will be a similar hike in tax rates for all new cars, with a graduated rate starting from 5% for cars costing below US$13,000 – and there are not many of those – up to 60% for those in the above US$45,000 range.
Whilst the Government claims this is a necessary step to encourage drivers to be less dependent on their cars and opt for public transport, Opposition politicians claim that this will encourage drivers to hang on to their older, less environmentally sensitive clunkers, which will ultimately impact the country’s environment. But there is more. There will also be additional taxes on lubricating oils and fuel, making it very expensive to be a motorist in the Philippines in the future. Just as well you can get X-1R in that territory to help with those increases in costs.
image source: BBC