China may raise consumption tax on big cars to 25%-40%

Shanghai, June 30 (Gasgoo.com) China's Ministry of Finance and State Administration of Taxation may further raise vehicle consumption tax by 10% to 20% soon, a local Chinese newspaper citing industry sources said today.

The tax rate of vehicles with displacement of 3.0L to 4.0L will increase to 25% from 15%; The tax rate of 4.0L and above vehicles will rise to 40% from the current 20%, according to Chengdu Business Daily, adding that dealers of imported vehicles have already got this information.

"If the new consumption tax is implemented, the selling prices of imported vehicles will have to increase significantly," said Mr Zhao, a sales manager of Chrysler, Sabb and Opel dealers.

"Take Benz S350 and Benz S600 for example, their prices will grow by 200,000 yuan ($29,148) and 500,000 yuan each," he said.

Jia Xinguang, an independent auto analyst based in Beijing, agreed that the consumption tax hike will influence the selling price of imported cars, particularly those with higher displacement.