China to halve purchase tax for small vehicles to boost sales
To stimulate China's flagging auto industry, the central government will halve the purchase tax on light vehicles with engine displacement of 1.6 liters and smaller to 5 percent.
The tax cut will be effective from Thursday, Oct. 1, through 2016, the government announced Tuesday.
The move will mainly benefit Japanese and domestic Chinese brands, which mostly produce small cars.
China's light-vehicle sales declined for the third consecutive month in August, dipping 3.4 percent year on year to 1.42 million vehicles, as the stagnating national economy continued to dampen market demand.
The last time Beijing cut the sales tax for small vehicles was in 2009, when an economic crisis ensnared much of the world.
At the time, the government reduced the tax for vehicles with engine sizes of 1.6 liters and smaller to 5 percent, down from 10 percent.
Vehicle sales subsequently soared more than 50 percent in 2009.
In 2010, Beijing raised the sales tax for small vehicles up to 7.5 percent, and restored it to 10 percent the following year.
The move will mainly benefit Japanese and domestic Chinese brands, which mostly produce small cars.
China's light-vehicle sales declined for the third consecutive month in August, dipping 3.4 percent year on year to 1.42 million vehicles, as the stagnating national economy continued to dampen market demand.
The last time Beijing cut the sales tax for small vehicles was in 2009, when an economic crisis ensnared much of the world.
At the time, the government reduced the tax for vehicles with engine sizes of 1.6 liters and smaller to 5 percent, down from 10 percent.
Vehicle sales subsequently soared more than 50 percent in 2009.
In 2010, Beijing raised the sales tax for small vehicles up to 7.5 percent, and restored it to 10 percent the following year.
