Buyers of big cars will pay more tax
By Wu Chong (China Daily)
Updated: 2005-11-25 05:47
Buyers of big cars will fork out more taxes and those who opt for smaller
models will pay less under a revised auto consumption tax likely to come into
force next year.
Industry experts see it as a government move to increase fuel efficiency and
The current tax structure, which has three slabs for
different engine sizes, is likely to have five, Zhang Jinhua, deputy director of
the China Automotive Technology and Research Centre, said yesterday in Beijing.
A Honda SUV is on display at a
promotional activity. [newsphoto/file]
For instance, cars with engine displacement of 1 litre or less will pay 1 per
cent instead of the current 3 per cent while vehicles with 4 litre or higher
engines would pay between 20-25 per cent instead of the current 8 per cent.
"The consumption tax reform cannot have an immediate impact on the
clean-vehicle market. But at least, it is an inspiration for car makers," Zhang
said at the 4th International Clean Vehicle Technology Conference and
Earlier this month, Feng Fei, a senior official of the government's top
think-tank, proposed that tax be levied on buyers rather than on auto producers
as is done now.
"We suggest that tax be levied on car buyers directly, which will encourage
them to consider buying economy vehicles with lower emissions," said Fei,
director of the industry department of the State Council Development Research
At yesterday's conference, Zhang said if emissions were to be cut
significantly, it would require State backing. "Substantial support from the
government is needed. Without it, the price for hybrid vehicles will remain high
and the market can never grow," he said.
Prius, jointly manufactured by Japan-based Toyota and the China FAW Group
Corporation, will be the first hybrid car available in the Chinese market.
Zhu Yanfeng, president of the joint venture, announced on Wednesday that
Prius would be available from mid-December for 250,000 yuan (US$31,000) a price
tag substantially higher than the average.
(China Daily 11/25/2005 page1)