The Chinese government has eliminated or reduce the consumption tax on all cosmetic products sold in the country, as part of a range of measures aimed at stimulating domestic spending.
The consumption tax was previously 30% on cosmetic products. However, effective 1 October, there is no tax for non-luxury cosmetics, while luxury cosmetics only face a 15% tax.
The Finance Ministry will be hoping the move will lead to a reduction in Chinese shoppers buying from other countries, such as Australia, and lead to an increase in demand for imported products. However, analysts have warned that other tariffs still remain high, and the move is only expected to moderately boost internal demand.