Increase in car taxes expected
28 September 2005
A rise in automobile taxes is expected soon to push status-conscious Chinese buyers into choosing vehicles with smaller engines, in line with energy conservation efforts, the Asia Wall Street Journal reported. The new auto-consumption tax, which will include significantly higher rates on large-engined vehicles, is currently being studied by the National Development and Reform Commission. At present, China has a 3% one-time consumption tax on compact cars with engine sizes of one liter or less, 5% on those between one and 2.2 liters, and 8% for 2.2 liters and above. Industry observers expect the new policy to charge as much as 20% consumption tax on vehicles with engines above four liters.
