It is reported that the cars demanding is more and more, while the auto tax i s also attracting all lines’attention. Recently, at 2013 International Forum on Chinese automotive industry development, Development and Reform Commission Equipment Dept. Director Li Gang raised a hot topic, that is: Auto consumption tax reform, the direction of which is to cancel the purchase tax. In his view, the automobile purchase tax should be canceled and transferred to fuel tax and realize local and Central share, which can lower the threshold of buying a car but raising the threshold of using the car.
Li Gang said that currently, the existing indirect tax is 70% while the direct tax is 30%. However, in developed countries, except of the United States, the existing indirect tax is 30% while the direct tax is 70%. Under this system can the market economy be taken. The market economy is economic interests and economic interests mainly rely on tax. Its adjustments will direct all business and all government actions. Finally, Li Gang called on the industry to contribute to reform of the tax system.
Chief Economist at the Agricultural Bank of China Xiang Songzuo comment on this issue.
He said, “I think the car purchase tax adjustments should be in two orientations: one is to appropriately cut car purchase tax from the over high 10% down to 5%, or at most 6%. The second problem is levelize the the car purchase tax, for example, according to the different engines, tax rates should be adjusted to encourage everyone to buy less high-emission cars, and the vehicle purchase tax with the higher flow rate should be a little higher so as to encourage everyone to buy low-emission and fuel-efficient cars.”
