 |
China to Impose Automobile Purchase Tax
China will begin to levy tax on the purchasing of automobiles from January 1, 2001, the Ministry of Finance announced Monday, December 4.
The tax is designed to replace the existing fee that road transport authorities charge on the purchasing of automobiles. The tax rate will be 10 percent of the purchasing price of the automobile.
The Ministry of Finance said that the tax revenue belongs to the central treasury and will be used on key construction of highways at both national and provincial levels. Highway construction in western parts of China will enjoy priority in using the tax money.
In order to secure the coherence of government policies, the central government will compensate local governments with part of the tax revenue for the reduction in funding of some projects that have already been approved by the central government and are funded with money from the automobile purchasing fee.
Motor Purchase Tax Doesn't Affect Chinese Auto Market
Informed sources say that the collection of auto purchase tax to be started next year wouldn't add extra economic burden on buyers, so it won't have any impact on the auto consumption market.
In the Provisional Regulations of the People's Republic of China on Vehicle Purchase Tax, a document already adopted at an executive meeting of the State Council, it is stipulated that as of January 1, 2001, a 10 percent vehicle purchase tax for all motor cars and motorcycles shall be paid to the tax department. As soon as the news was announced, many people expressed the view that this move may spark a rise in the price of cars.
In This Section
|