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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.
An official with the relevant department told the reporter on November 29 that the vehicle purchase tax is only a substitute for the purchase fee currently handed over by the owner to the communications department, the amounts of both are the same, i.e., 10 percent of the price of a car; the only difference is that the fee will be replaced by tax and the money will be handed in to tax bureau instead of the communications bureau. There is no change in the payment of other fees.
By PD Online staff Deng Gang
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