The Secretary for tax policy of the Finance Ministry, Shi
Yaobin, said recently in Tianjin that China's auto industry has
developed rapidly and placed heavy burdens on the country's
resources and environment. Currently, the Finance Ministry is
considering introducing a series of tax policies to promote energy
conservation development and environmentally friendly vehicles.
Shi expressed the above idea recently at the "International
Forum on Chinese Automotive Industry Development" (IFCAID) held in
Tianjin. He said that the rapid increase in consumption and
possession of automobiles would surely lead to a continuous growing
demand for fuel. Consequently pollution emissions from automobiles
are also on the rise. Now automobiles are becoming major energy
consumers and pollution producers in China.
Shi said that the ministry is planning to reform and improve the
auto-related tax policies. Taxes can help guide the long-term
development of the automotive industry, he said.
The ministry is now considering preferential tax policies that
encourage the energy conservation development and environmentally
friendly automobiles. Also they are studying all clean fuel tax
policies related to vehicle emissions.
Tax policies that restrict the development of fuel inefficient
automobiles will also be introduced, according to Shi. The ministry
is now researching and formulating punitive tax policies that can
be levied on automobiles failing to reach official fuel consumption
With regard to the fuel tax reform program, Shi said that, with
various preparations having been finished, the government will
choose a proper time to introduce the fuel tax.
The ministry is also studying the possibilities of collecting an
environmental tax. In the meantime, in order to give a full play to
the consumption tax in adjusting production vs. consumption,
automobile tax ranges will be readjusted to restrict the
development of high-emission automobiles.
Statistics show that at present there are 50 million automobiles
in China. Auto fuel consumption accounts for about one third of the
total fuel consumption. The percentage is expected to reach 57
percent in 2020. Moreover, motor vehicles have replaced soot as the
biggest air pollution sources in some big cities.
(China.org.cn by Zhang Ming'ai, September 13, 2007)