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 reduce emissions.
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.
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 Exhibition.
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 Centre.
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
averag
