Consumption tax is an important part of China's tax system. But do you know what methods are used to calculate it? There are mainly two ways: ad valorem taxation and specific taxation. Ad valorem taxation calculates taxes based on the price of goods or services, while specific taxation determines the tax amount according to the quantity of taxable items. 💰

For example, luxury cars are often taxed under the ad valorem method because their prices vary greatly. On the other hand, beer and gasoline are usually subject to specific taxation since their tax amounts depend more on volume than price. 🚘🍺

In addition, there’s also a compound taxation method that combines both approaches. This method is commonly applied to cigarettes, where taxes are levied not only on the selling price but also on the quantity sold. 🚬

Understanding these methods helps businesses plan their finances better and comply with tax regulations. If you’re curious about how they affect your purchases, keep an eye on product pricing! 🛒👀