China May Tax Big Cars As Much as 40 Percent

SHANGHAI, China — China is raising its sales tax on big cars to as high as 40 percent, and drastically cutting taxes on small cars, in its latest attempt to combat emissions that contribute to heavy blankets of smog over most of its cities.

The tax on passenger vehicles with engines bigger than 4 liters will be doubled to 40 percent from 20 percent, effective Sept. 1, the Finance Ministry said Wednesday in a statement on its Web site. Those buying vehicles with engines sized from 2 liters up to 4 liters will have to pay a 25 percent tax, up from the current 15 percent, it said.

"Autos are the giants of energy consumption and pollution emissions and this is a major part of the effort to conserve resources and reduce emissions," the ministry said.

The sales tax for cars with engines at or smaller than 1 liter would drop to 1 percent from the current 3 percent, the Finance Ministry said.

Tax rates of 5 percent to 9 percent for vehicles with other-sized engines remain unchanged.

China is the world's second biggest market for passenger cars, with some analysts forecasting that sales could reach 10 million this year.

The country's big cities have imposed auto emissions standards that exceed those in the U.S. and are at least equal to European levels. Shanghai has banned heavily polluting small motor scooters and limits access to its downtown areas by vehicles failing to meet clean air standards.

At the same time, authorities are seeking ways to reduce fuel consumption amid major shortages, especially of diesel.

But overall, China appears to have made little headway in its struggle to reduce auto emissions, seen most prominently in the effort to keep smoggy Beijing's skies clear during the Olympic games.

Vehicle exhaust accounts for about 80 percent of urban air pollution. Many cities are frequently cloaked in a toxic gray haze that has grown worse as the numbers of vehicles on the roads has risen precipitously in recent years.

Pollution by large commercial vehicles and many buses appears to go unchecked.

Auto purchases are less affected by high global oil prices in China than in the West because government controls keep retail gasoline and diesel prices at levels that are among the world's lowest.

While the majority of passenger cars sold in China are compact cars, drivers who can afford them are increasingly opting for bigger vehicles. The China Association of Automobile Manufacturers reported that sales of big sedans rose nearly 50 percent in the first half of this year, while automakers say sales of SUVs and luxury sedans have doubled.

Comments

[vietveter]

Smart move.

We should get with that program.

[chinationreport]

China is greener than you think!
Search this article at

http://www.chinationreport.com/#EditorsChoice

[marinade]

This must be how things work when lobbyists and campaign contributions are taken out of the equation.

[sociocanuck]

Not really suprised. With the exception of that Wall of theirs China has always struck me as a place that prefers small things.

[Erdgeist]

Thinking about some of Nathaniel Hawthorne's great works, I have concluded that since the inception of this nation there have been two types of Americans: the rational and the irrational. Even the Civil War was fought on the basis of the rational against the irrational. No wonder we can't stop the pollution and the gas guzzling. Half the public is stark raving mad.

[KillTheMessenger]

Hey, you have to remember that you got all the people nobody wanted in Europe and Asia...

[KillTheMessenger]

China gets it right, again. One would only wish our politicians would have this much insight.

[mamacat]

Calilfornia Governor Gray Davis tried to do something like this. He wanted to put a tax of a few hundred dollars per year on expensive cars. The GOP used the issue to impeach him as governor. I always thought it was really stupid to impeach him, or to drive monster trucks to the grocery store.

Today we have Arney ("I'll be back!") for governor, who singlehandedly got the Hummer available for private consumption in this country.

BTW, GOP Rep. Issa from San Diego financed the campaign to impeach Davis for trying to do something about big and expensive vehicles, while trying to balance the budget.

[TrooAmerican]

The GOP are just so silly.

Imagine that, China has only been a major polluter and oil consumer over the past 10-15 yrs, and they are already doing something about large vehicles.

While we in American continue to subsidize the wealthy and useless in handing out Tax BREAKS for large oversized vehicles..... odd.

Cuz from where im at, only people making good money with low bills can afford the 10grand downpayments with $700/monthly payments and $300/month insurance and still have a house.

[samandally]

And while you bash Republicans also add the DEMS to the list. What have they done since the big 2006 win?

[OldKnute]

Yes,, Mamacat,

Also,,, Enron Raping California, frightening off investors in the Dot.Com folks, with huge bills and electrical brown-out and Black-outs. Investors went running back to Wall Street and Brick and Mortar, as fast as they could, thanks to Enron. Millions of Californians lost their jobs.

Big Oil wanted more SUVs, more HUGE luxury cars, more giant twin-cab Pick-Ups in California and they got them. More oil demand,, means more support for the then,,, upcoming War in Iraq. War in Iraq means FEAR rules America and California is the one suffering.

Well now we have it all, Big cars and a dirty war.

Yep,, the GOP won this round, and DEATH is their payment.

But the article is very hopeful. With this excise tax,, for only the most wealthy,, China can pay for the Solar and Wind that will solve their Oil Dependency. They had to spend 40 Billion and shut down factories just to have the air clean during the Olympics.

They are already building the first Solar City, Using Solar for power in rural areas.

Yes,, China is going GREEN and FAST.

Clean air,, and abundant,, FREE Energy.

All the best

Knute Neo-LIB

[mamacat]

One more item to add to the list of insanities: Arney can't come out and admit that he was wrong about repealing the tax on Hummers and Luxury cars, but we have an out of balance budget, so he has decided the best way to do it is to lay off 20,000 teachers.

One more time. According to our Republican governor, 1.) putting a small tax on expensive vehicles, whose owners can afford the tax, is a bad thing, while, 2.) laying off 20,000 teachers is a good thing.

Arney is very popular, but for the life of me, I can't see why.

[LAJonathan]

Wow, China does the smart thing right out of the gate and taxes them, and we still give them a tax break!! We need to figure this stuff out or we will be third world by 2020.

[morganhill]

.... "will be third world by 2020"? We're on a faster track than that!

[sheila]

although this example is a bit extreme, overconsumption should be discouraged by taxes, including property taxes for inefficient McMansions, gas-guzzling cars, and other wasteful products and processes. the earnings should be plowed straight into REWARDS for people who do the right thing, like install solar panels, build passive solar/superefficient structures, take mass transit, etc.

the current tax and pricing systems for most of our goods and services externalizes (socializes) far too many of its costs onto ratepayers, taxpayers and the environment, while privatizing all its profits (especially since none of these corporations seem to pay taxes!).

time for the TRUE costs of everything to be included in the price of everything. living wages, fair trade, organics, environmentally sustainable practices, etc. should all be required, and if there is an additional cost to them, then the prices should reflect that, which will hopefully reduce overall consumption while improving quality of life for all.

the current system is a pyramid scheme, and those at the bottom (workers and environment) are getting totally screwed because those at the top don't have to pay their own way...

[Podewumun]

The Chinese are smart enough to expose (and tax) SUVs for what they are - an unnecessary ego indulgence.