After removing tariffs, Hainan, China’s biggest duty-free market, is planning to remove VAT and excise tax for imported wine and spirits in a bold move to further boost its attractiveness for tourists, as wealthy Chinese shoppers shift their spending back to home.
Yao Lei, the first-level inspector of Hainan provincial department of commerce, said: “In the future, commodities that entered Hainan through customs will be exempted from tariffs, VAT and excise tax. Currently alcoholic beverage is a heavily levied commodity subject to excise tax, and will be levied with VAT if any imported procedures are involved. But in the future, imported drinks such as whiskey and brandy will be exempted from tariffs, VAT and excise tax when entering Hainan.”
However, the official did not specify a timeline for the removal. Currently, China imposes 10% excise tax and 13% VAT on imported wines in addition to 14% import tariffs; while whisky is subject to 20% excise tax, 13% VAT and 5% import tariff.