China extends new-energy vehicle tax exemptions by two years

BEIJING - China announced Wednesday to extend tax exemptions on new-energy vehicle (NEV) purchases by an additional two years to better promote the sector's development and boost car sales.

The tax exemptions, which were set to expire at the end of this year, will continue from Jan 1 2021 until Dec 31, 2022, for electric, plug-in hybrid and fuel cell-powered vehicles, according to a statement jointly issued by the Ministry of Finance, State Taxation Administration and Ministry of Industry and Information Technology.

The move was decided at a State Council meeting last month, during which the government vowed to roll out a set of fiscal and financial policies to expand domestic demand, assist businesses reopening, sustain employment, and help all types of businesses to weather this difficult time.

China's passenger car market recorded a strong month-on-month rebound in March as business resumption gained momentum amid further containment of the COVID-19 epidemic.

NEV sales, which fell 70 percent month on month in Feb., jumped 400 percent in March from February, according to the China Passenger Car Association.