China to raise small-car sales tax to 7.5% from Jan. 1

China will charge a 7.5-percent sales tax on vehicles with engines of up to 1.6 liters or less, effective from Jan. 1 to the end of 2010, the Ministry of Finance said in a statement on its Web site Wednesday.

The tax will be lifted from the current 5 percent of the vehicle price, but still lower than the 10 percent rate before the stimulus policy, according to the statement.

The State Council announced on Dec. 10 the government would maintain the auto stimulus packages through the next year, which also included subsidies for trade-ins.

The stimulus package rolled out by the government in January boosted auto sales to 12.23 million in the first 11 months, up 42.39 percent year on year, according to the China Association of Automobile Manufacturers.

Li Yizhong, Minister of Industry and Information Technology, said Monday the stimulus packages were effective in bolstering auto sales, and he expected total sales this year would exceed 13 million, up 40 percent year on year.