Chongqing looks set to become the guinea pig for the introduction of the much discussed and highly controversial residential property tax. Xinhua reports that such a tax on high-end residential real estate has got the nod from the finance ministry and the mayor of the southwestern city. It us up now to the municipal legislature to approve it, usually a rubber-stamp exercise.
Xinhua says the tax could start being levied as soon as March. Then it will be a case of seeing how well it cools real-estate speculation, if at all. Other reports have suggested it will start at 1% and apply to new home purchases only. If so that would get it off to a typically unruffling start.
The long-anticipated fuel tax rise has come into effect, with, as expected, an offsetting cut in gasoline pump prices.
The National Development and Reform Commission has announced that fuel consumption tax will increase from 0.2 yuan a liter to 1 yuan a liter on gasoline and from 0.1 yuan a liter to 0.8 yuan a liter for diesel. At the same time, the retail price of gas has been cut by 0.91 yuan per liter, and of diesel by 1.08 yuan, as of midnight Thursday.
Corresponding tax rises and price cuts for commercial gasoline and diesel and jet fuel were announced the day before to take effect on January 1st. Six categories of tolls for road and waterway maintenance and management will be scrapped the same day.
The changes are part of a drive to make China’s energy use more efficient through market based pricing, but the actual impact will be small to start with. No chances are being taken with depressing demand given the overall economic slowdown.