(Yicai Global) June 6 -- China's duty-free products will retain their price advantage over high-street outlets even after the country brings in an average reduction on tax rates from 15.7% to 6.9% on nearly 1,500 products in July, says a leading player in the sector.
Duty-free products will continue to benefit from not only exemption of custom duty, but also from value-added and goods and service taxes, China International Travel Service Co. said at an investor forum as part of efforts to allay fears about the incoming tariff reductions.
China's finance ministry announced the plan to cut import tariffs on 1,449 products imported from most favored nations last week, covering consumer items including apparel, cosmetics, home appliances, and drugs.
CITS has engaged in the duty-free sector since 2003 when it merged with China Duty-Free Group. Sunrise Duty Free and China Duty Free Group are the two top ranking firms in the industry with annual revenue of around CNY10 billion (USD1.6 billion) and CNY8 billion, respectively. China Duty Free Group occupies half of Chinese duty-free sales thanks to its stakes in other companies including a 51 percent stake in Sunrise Duty Free. Other key companies in the sector include Zhuhai Duty-Free Group, Shenzhen State-Owned Duty Free Group and Zhongqiao Duty Free Group.
CITS posted duty-free sales of CNY14.9 billion in 2017, up nearly 70 percent annually. China Duty Free Group contributed close to 40% of CITS's total income in 2017.
Editor: William Clegg