The government is considering a proposal to link
vehicle tax to exhaust emissions, the State Council's
Development and Research Center told China Daily on
Friday.
"The government will levy no tax if consumers buy
lower-level or zero emission vehicles," said Feng Fei, director of
the center’s industry department. "Those who buy cars with higher
emissions will be taxed more heavily."
For cars with an engine capacity of more than 3
liters, tax could run as high as 15-20 percent, Feng said.
At the moment, vehicle tax is between 3 and 8
percent and is levied on auto producers before vehicles enter the
market.
"We suggest that tax be levied on car buyers
directly. This will encourage them to consider more economic
vehicles with lower emissions," said Feng.
He said the center recently finalized a report on
car tax that has already been submitted to central government, but
did not reveal when the suggestions might be implemented.
"The taxation change is mainly aimed at encouraging
car owners to consume less oil and at cushioning environmental
pressures," said Feng.
A previous report from the development and research
center stressed that oil supply and the environment would be great
challenges for the country.
It predicted that by 2010, cars will consume 138
million tons of oil each year, 43 percent of China's total oil
demand, with this figure growing to 256 million tons, 57 percent of
total demand, by 2020.
"In the future urban pollution will mainly be
generated by automobiles, unless we are able to effectively control
exhaust emissions," he said.
Feng said the proposal to levy a higher tax on cars
would not mean suppressing the development of the car industry.
"China's auto industry is vital for driving the
country's economy forward," said Feng. "What we need is healthy
development in line with the capacity of our resources."
(China Daily June 27, 2005)