Chinese government is considering a proposal of linking vehicle tax with exhaust emissions, in a bidto alleviate the pressure of increasing automobiles on environment, Monday's China Daily quoted a top official as saying.

"The government will levy no tax if consumers buy lower-level or zero emission vehicles," said Feng Fei, director of the industry department at the State Council's Development and Research Center.

"Those who buy cars with higher emission will be taxed more heavily."

For cars with an engine capacity of more than 3.0 liters, tax could run as high as 15 percent or 20 percent, Feng said.

At the moment, vehicle tax is between 3 percent and 8 percent and is levied on auto producers before vehicles enter the market.

"We suggest that tax be levied on car buyers directly, this will encourage them to consider more vehicles with lower emissions," Feng said.

According to the director, the research and development center recently finalized a report on car tax and submitted it to the central government for approval. Feng did not reveal when the suggestions will be implemented.

"The taxation change is mainly aimed at encouraging car owners to consume less oil and at cushioning environmental pressures," Feng said.

A previous report from the development and research center stressed that oil supply and the environment would be great challenges for the country.

The center predicts that by 2010, cars will consume 138 milliontons of oil each year, 43 per cent of China's total oil demand, with this figure growing to 256 million tons, 57 per cent of the total demand, by 2020.

"In the future, urban pollution will mainly be generated by automobiles, unless we are able to effectively control exhaust emission," he said.

Source: Xinhua