New auto-sales tax may cover 1.8-2.0L cars

Shanghai, November 2 (Gasgoo.com) As the sales tax cuts for smaller cars are to expire at the end of this year, the new policy of auto sales tax is set to be published in the coming days, Chinese Business View reported today.

It is said apart from the extension of the current policy that halved purchase tax on small vehicles with the 1.6L or smaller engine size, autos with 1.8L to 2.0L engines may also benefit from the forthcoming policy.

Three proposals are possible to come into effect. The first proposal is that the current stimulus measure of tax cut (to 5%) on small cars with an engine size of 1.6 liters or less will be relaxed to 2.0 liters.

The second is based on the first proposal but reinforces the stimulus, canceling sales tax on cars with less than a 1.4L engine. Another proposal is about extending the current policy on cars with an engine size of 1.6 liters or less only.

Although the final decision has not been announced yet, the domestic prediction all goes positive for Chinese auto market.