China Considering Sales Tax Cut To Boost Car Buying; Subsidies for Green Cars

China, whose big cities often are choked by smog so dense it is hard to see through, is taking aggressive steps to push its people into cleaner, more fuel-efficient cars -- even as it continues to build carbon-belching, coal-fired power plants.

In what Chinese officials see as both an environmental and economic move, the national government is considering reducing or abolishing a purchase tax on new cars while at the same time providing subsidies to consumers who buy low emission, fuel-efficient vehicles.

"The adjustment on taxation could be one of the most effective measures to boost vehicle sales if the [economic] slowdown continues," Dong Jianping, deputy secretary general of the China Association of Automobile Manufacturers told the Shanghai Daily newspaper.

Dong also said that cutting the purchase tax would be dependent on vehicle engine size -- with engines smaller than 1.5 liters receiving a bigger benefit.

The Chinese government already pushes use of more fuel-efficient vehicles by boosting taxes on vehicles with engine sizes greater than 3.0 liters and reducing them on vehicles with engines smaller than 1.0 liter.

In addition, the newspaper reported, China's commerce ministry is studying a direct subsidy program for purchasers of eco-friendly vehicles and expects to put it in place soon. No details are available.

Posted by

John O'Dell December 12, 2008, 2:16 PM

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Green Vehicles

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China Automoobile Sales, China Eco-Friendly Car Invcentives