Higher tax mooted for gas-guzzling cars
By Richard Fu |
October 26, 2010, Tuesday
|
Print Edition
Print Edition
CHINA is considering raising taxes on gas-guzzling large-engined cars while reducing the amount owners of greener, more efficient vehicles pay, in a bid to encourage energy conservation and curb pollution.
A new draft law proposes to link the so-called vehicle and vessel tax to engine size. Currently, the tax on passenger vehicles in China ranges from 360 yuan (US$54) to 660 yuan a year.
The amount depends on the numbers of seats and which province a car is registered in, not whether it's a luxury vehicle.
The National People's Congress, China's top legislature, yesterday began reviewing the draft law at a bimonthly legislative session.
The legislation will affect passenger cars - defined as vehicles with a seating capacity of less than nine passengers. These account for 72 percent of China's vehicle ownership.
The draft law, which stipulates that owners of energy-intensive and highly-polluting cars will have to pay more tax, also sets out provisions for reducing taxes on energy-saving and clean energy-powered vehicles.
Some observers say the new tax could trigger demand for small-engined cars but not necessarily affect the market for big-engine ones.
"Considering that buyers of large-engined passenger cars are not sensitive to costs, we don't think the policy will affect overall car demand," Xiangcai Securities analyst Liu Jie said in a report.
The tax on vehicles with engines of 1.6 liters or less, which make up 58 percent of China's passenger cars, will remain unchanged or be reduced slightly, according to a report delivered by Chinese Finance Minister Xie Xuren at yesterday's meeting.
Tax will rise "moderately" for cars with engines between 1.6 liters and 2.5 liters, which account for 39 percent, and jump "relatively greatly" for cars with engines above 2.5 liters, which make up 3 percent of total car numbers.
Details of car tax prices were not made public at yesterday's meeting.
The draft law was passed at an executive meeting of the State Council on October 12.
Taxes paid on motorcycles, three-wheel motor vehicles and low-speed trucks, which are mainly used in rural areas, will be reduced or remain unchanged, according to the draft law.
The 17th Session of the Standing Committee of the 11th National People's Congress runs until Thursday.
A new draft law proposes to link the so-called vehicle and vessel tax to engine size. Currently, the tax on passenger vehicles in China ranges from 360 yuan (US$54) to 660 yuan a year.
The amount depends on the numbers of seats and which province a car is registered in, not whether it's a luxury vehicle.
The National People's Congress, China's top legislature, yesterday began reviewing the draft law at a bimonthly legislative session.
The legislation will affect passenger cars - defined as vehicles with a seating capacity of less than nine passengers. These account for 72 percent of China's vehicle ownership.
The draft law, which stipulates that owners of energy-intensive and highly-polluting cars will have to pay more tax, also sets out provisions for reducing taxes on energy-saving and clean energy-powered vehicles.
Some observers say the new tax could trigger demand for small-engined cars but not necessarily affect the market for big-engine ones.
"Considering that buyers of large-engined passenger cars are not sensitive to costs, we don't think the policy will affect overall car demand," Xiangcai Securities analyst Liu Jie said in a report.
The tax on vehicles with engines of 1.6 liters or less, which make up 58 percent of China's passenger cars, will remain unchanged or be reduced slightly, according to a report delivered by Chinese Finance Minister Xie Xuren at yesterday's meeting.
Tax will rise "moderately" for cars with engines between 1.6 liters and 2.5 liters, which account for 39 percent, and jump "relatively greatly" for cars with engines above 2.5 liters, which make up 3 percent of total car numbers.
Details of car tax prices were not made public at yesterday's meeting.
The draft law was passed at an executive meeting of the State Council on October 12.
Taxes paid on motorcycles, three-wheel motor vehicles and low-speed trucks, which are mainly used in rural areas, will be reduced or remain unchanged, according to the draft law.
The 17th Session of the Standing Committee of the 11th National People's Congress runs until Thursday.
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