BEIJING : China is planning to expand a consumption tax on luxury items and adjust upward other taxes in an effort to even out income distribution and reduce poverty.

Ongoing tax reforms should include adjustments to the personal income tax, property tax, and consumption tax in an effort to "strengthen the role of taxation in reducing poverty," the China Business News cited Wang Li, vice head of the State Administration of Taxation, as saying.

Wang was speaking at a forum on fiscal reform, it said.

No timetable or other details were given, but the report said that items such as jewellry and VIP club memberships could be added to the existing list of taxable luxury items.

Following nearly 25 years of robust economic reforms, China''s living standards have improved markedly, yet a widening gap between rich and poor has opened to the point of becoming a leading social concern.

On April 1, the government imposed a consumption tax on wooden floor panels, yachts, luxury watches, golf clubs, oil-based products and other items.

According to Tang Gongliang, a tax expert at the Central University of Finance and Economics, China needed to constantly adjust the list of taxable luxury items to reflect the current state of the economy, Xinhua news agency said.

"Luxury items are not easily defined," Tang said.

"With people''s living standards increasing quickly, some items which were once luxuries have become common and are no longer regarded as luxury items," he said, citing electronic products such as sound systems as an example.

China collected 142.85 billion yuan (18.2 billion dollars) in consumption taxes in the first nine months of this year, compared with 163.43 billion yuan for all of 2005, the report said.

- AFP /ls