FORMER NINGXIA PARTY BOSS LOBBIED BEIJING FOR DOMESTIC WINE TAX BREAKS
By David Ma
A senior member of the Chinese Communist Party (CCP) in the burgeoning Ningxia wine region has called on Beijing to cut consumption tax and VAT for domestic wines to help the local wine industry which has been hardly hit by the rise of imported wines.
Cui Bo, former deputy secretary of CCP’s Ningxia committee, has submitted a proposal to the Chinese People’s Political Consultative Conference (CCPCC) now convening in Beijing to gradually eliminate the 10% consumption tax and the 16% VAT levied on domestic wines.
“The high tax rate has added pressure on China’s wine producers in an already highly competitive market,” Cui told reporters covering the annual meeting of CCPCC of which Cui is a member.
Cui said imported wines have been increasing by more than 30% annually since 2011, leading to continuous decline in output of domestic wines.
He said this situation has done damages to wine producing regions like Shandong, Hebei, Shanxi, Gansu and Ningxia where incomes of wine industry workers have struggled to increase.
Take Ningxia as example, Cui added, the area under vines have reached 650,000 mu (43,300 hectares), including 570,000 mu (38,000 hectares) of wine grapes. There are 86 wineries producing 120 million bottles every year. The industry employs about 75,000 permanent and 100,000 seasonal workers whose livelihoods are dependent on a healthy wine industry.
“China’s free trade agreements with some wine exporting countries allow high-quality and low-cost foreign wines to enter China with zero tariffs, this put further pressure on China's wine industry which is still in its infancy,” said Cui.
He recommended a gradual elimination of consumption tax and VAT for domestic wines to help the industry survive and continue to grow.
It’s common practice in China for local officials to lobby for policies for their local areas during the annual meetings of the CCPCC and the Chinese People’s Congress.
Their proposals will be registered and will receive attention from the delegates attending the annual meeting. Some of these proposals would become policies if found fit by the central authority.
(the writer can be contacted at: DavidMa@thewinechronicle.com)
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