In light of the continuous increase of oil price, the relevant departments in China are now working on the policies guiding vehicle consumption in the country. Vehicles of high oil consumption and big displacement capability will be levied with higher consumption tax, and the move will bring some change to the domestic auto market, reported Oriental Morning Post.

Currently, the tax rate for mini-sedan with the displacement capability under 1.0 L in China is three percent, and that for ordinary sedan with the discharge capability of 1.0 L to 2.2 L five percent, and for those above 2.2 L eight percent. However, the consumption tax rate for SUV and MPV is only three percent and five percent respectively. "There will be big adjustment in vehicle consumption tax: consumption tax for light-displacement vehicles of 1.0 L will be cancelled and for large displacement vehicles of 2.2 L will greatly rise, with the highest possible being as high as 27 percent of the vehicle's price," said an official with Ministry of Finance on condition of anonymity. It is reported that the new tax rate will be passed in next one to two months.

By People's Daily Online