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April 3, 2019

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Life gets cheaper as VAT cut kicks in

Apple Inc and other consumer brands lowered prices for their products in China this week as a cut in the country’s value-added tax fell.

Price tags for products on Apple’s China website were lowered on Monday morning — when the VAT fell to 13 percent from 16 percent — including a discount of up to 500 yuan (US$74.44) for some of its latest iPhone models.

Suggested retail prices for brands including LVMH’s Louis Vuitton and Kering’s Gucci were also cut by around 3 percent, according to local media reports.

It follows announcements last month from car brands BMW AG and Mercedes-Benz, which said prices for several car models would drop following the tax changes.

China said in March that it would cut taxes and fees for all companies by nearly 2 trillion yuan in 2019, with the manufacturing, transportation and construction sectors set to benefit as it looks to stimulate a slowing economy.

The world’s second-largest economy is growing at its weakest pace in almost three decades amid lower domestic demand and a trade war with the United States. Several Chinese electronics retailers lowered prices for iPhones in January.


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