The Ministry of Finance and the State Administration of Taxation of China has issued a notice saying that the vehicle excise tax policy will be adjusted as of September 1st 2008. At that time, the tax rate for high-emissions vehicles will be raised while that of low-emissions vehicles will be decreased.
The content of the policy reads as follows: Raise the tax rate for high-emissions vehicles whose air displacement is between 3.0L and 4.0L (including 4.0L) from 15% to 25% and more than 4.0L ones from 20% to 40%; and lower the tax rate for low-emissions vehicles whose air displacement is lower than 1.0L (including 1.0L) from 3% to 1%.
The purpose of this adjustment is to restrain the production and consumption of high-emissions vehicles and encourage the production and consumption of those with low-emissions. This is beneficial for decreasing the consumption of diesel oil; reducing air pollution; and achieving energy-savings and emissions reduction.
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