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The Oxford Health Alliance |
No tax breaks for tobacco companies
20 Aug 2009 | Important regulatory step forward in China
| 20 August 2009

To date, Chinese tobacco companies have been able to claim tax breaks on advertising and sponsorship spend but now, in a circular issued in September, this has been banned by the Ministry of Finance and the State Administration of Taxation. The ruling has been backdated to 1 January 2008, before which time Chinese firms could claim back 2 to 8 per cent of their taxable income.  Zhang Bin, an expert on price and tax studies at the Chinese Academy of Social Sciences, noted that this is a good indicator of the government’s new, tougher position on smoking.

This is an interim measure, as a comprehensive ban on all forms of tobacco promotion will come into force in China from the end of 2010.

Source: China Economic Review, 14 August 2009.