Consumption tax will be imposed on disposable wooden chopsticks, wooden floor panels, yachts, luxury watches and more oil-based products from April 1, the authorities announced yesterday.

A resident shows his disposable wooden chopsticks at home in Yichang, Central China's Hubei Province, March 22, 2006. The Chinese character reads "tax". [newsphoto]

The move is designed to control and regulate energy usage, help protect the environment by reducing the exploitation of timber resources, and narrow the gap between the poor and the rich by collecting a consumption tax on luxury items, the Ministry of Finance said. The tax has been approved by the central government, it added.

A 5-per cent consumption tax will be collected on disposable wooden chopsticks to discourage their use as they are a waste of timber resources, the ministry said.

The production of disposable chopsticks uses up 1.3 million cubic metres of timber each year and denudes the country's forests, the ministry said.

Each year, China sells 10 billion boxes of wooden chopsticks in the domestic market and exports about 6 billion boxes, according to estimates.

A 5-per cent tax on wooden floor panels will also discourage the consumption of timber resources.

Luxury items to be taxed include yachts, golf clubs and balls (10 per cent) and high-end watches (20 per cent).

Consumption tax on naphtha, solvents and, lubricants will be 0.2 yuan (2.5 US cents) per litre, and 0.1 yuan per litre for aviation fuel oil, said the ministry.

But the government will collect only 30 per cent of the announced tax on naphtha and solvents to reduce the impact on industry; and not collect the tax on aviation fuel for the time being.

The ministry said it would scrap consumption tax on skin-care and shampoo products from April 1.

Editor: Yan