Controversy: Do We Really Need Luxury Tax?

Recently, representatives of some financial experts and business circles in Nigeria have different opinions on the plan of the federal government to levy luxury tax in the whole country.

Kunle Quadri, former director of the West African Institute of Taxation, pointed out that the main reason why the government wants to levy the tax is that it can increase government revenue.

In addition, as a tool for "robbing the poor and helping the poor", the government levies a luxury tax to get income from the rich, and can benefit low-income groups from the tax.

There is a heated debate in global countries. How can we solve the problem of luxury tax? Or do we really need to levy luxury tax?

After the introduction of the luxury tax scheme in Nigeria, the outside world and the industry have a very unified view: increasing government revenue.

Kunle Claude, the former director of the West African Institute of Taxation, is undoubtedly a staunch supporter of this policy viewpoint.

He thinks that luxury tax can not only increase the revenue of the government, but also serve as a tool for "robbing the rich and helping the poor".

However, Agustin Ugl, the representative of Nigeria's domestic entrepreneurs, has some objections. The government's motion to levy luxury tax will annoy many middle and low income groups, because the government's poor management of tax revenue is likely to make more people "drill" the new tax loophole.

Augustin pointed out that if the government really wants to increase revenue, what the government urgently needs to do now is to reduce the scale of public expenditure, especially to reduce the scale of administrative expenses of government officials.

Guo Fanli, director of CIC consultant research, told the international finance daily that the purpose of collecting luxury tax proposals is to increase the revenue of Nigeria government to ease the impact of low oil prices on the Nigeria government.

"Nigeria's economic structure is highly dependent on oil, and oil occupies an absolute leading position in its economy. The oil sector accounts for 40% of GDP, accounting for more than 80% of government revenue.

However, in the past half year, the international political situation was unstable, and oil prices once fell below the cost price, which caused a great blow to the Nigeria government.

Guo Fanli analyzed.

stay

It seems that Nigeria is also looking for a new way to subsidize financial revenue.

Not just in Nigeria, as early as 2010, the government of Ukraine had already planned to levy a consumption tax on luxury goods, so as to further increase revenue and raise the minimum wage standard.

Meanwhile, the 19 Reuters Daily reported in November that a senior tax official in Venezuela said that the country would increase taxes on luxury goods and tobacco to support the government's revenue.

Venezuelan President Nicholas Maduro and tax Commissioner Jose David Cabello said on the same day's TV show that the luxury consumption tax will rise from 10 percentage points to 15 percentage points.

"Many countries have begun to levy a consumption tax on luxury goods, which has become one of the ways to increase revenue in some countries."

A professor of economics at Nanjing University told reporters that levying taxes on brandy, cigars and famous cars is the most common.

In addition, some countries also plan to levy taxes on water and land resources for enterprises.

"The Levy of luxury tax is a major trend. We cannot avoid it or stop it."

The professor said.

However, the Levy of luxury tax will have a strong inhibitory effect on the whole luxury industry, which is not conducive to the healthy development of the economy.

At present, Nigeria's economy is over dependent on oil. If we restrain the luxury jewelry industry, we will further increase its economic risk.

Guo Fanli said that under such circumstances, the government's desire to raise revenue can not be simply considered from the increase of tax burden. This has the tendency to "catch up with fish and fish". Only in the perspective of increasing economic vitality can the national economy enter a virtuous circle.

Of course, the purpose of luxury tax is not just to increase revenue.

In the view of the relevant people, luxury tax and luxury consumption tax are widely used by governments all over the world as a means of regulating production and consumption and redistribution of social wealth.

Reporters learned that the United States imposed a luxury tax of 10% on cars that cost more than 30 thousand dollars.

Sweden's consumption tax generally ranges from 20% to 25%. After taxes, some of the commodities that the government does not encourage consumption, such as luxury goods, can be doubled.

In Japan, if people eat in restaurants for more than a certain standard, they must pay a luxury tax to avoid eating and drinking, resulting in unnecessary waste. It is this kind of national accomplishment which starts from the small details and starts with a certain extent to cast the second world economic power today.

Is there a luxury tax in China? In fact, as early as 1994, China began to levy Excise Tax on 11 categories of cigarettes, liquor and alcohol, cosmetics, skin care and hair care products, precious jewelry and jewelry, jade, firecrackers, petrol, diesel, automobile tires, motorcycles, cars and so on.

After 12 years, the Ministry of Finance and the State Administration of Taxation jointly issued a notice to adjust the consumption tax system from April 1, 2006, abolished the tax category of "skin care products", adjusted the tax rate of some taxable consumer goods such as liquor, cars, motorcycles, automobile tires, and added some luxury items such as golf balls, ball watches, high-end watches and yachts.

In the view of Sharon Yeung, a luxury analyst, the Chinese actually started paying "luxury tax" very early, but the state did not "divide it expressly".

Today, the reform of consumption tax is also in the balance. The levy on high-end consumer goods and luxury jewelry has also become a new topic.

"The development direction of the consumption tax in the future is to strengthen the moderating effect, which is bound to start with increasing the tax burden."

Gao Peiyong, director of the Chinese Academy of Social Sciences and director of the Institute of Finance and Trade Economics of the Chinese Academy of Social Sciences, said in an interview with the media that the adjustment function of consumption tax is mainly regulated by tax rates. Therefore, this consumption tax reform is mainly aimed at some luxury high-end goods, and some products that are prone to environmental pollution and seriously consume resources, etc., which are included in the scope of the consumption tax levy or to raise the tax rate.