China mulls higher tax on fuel-guzzler vehicles

Shanghai, July 2 (Gasgoo.com) China is preparing to levying additional taxes on high fuel consumption vehicles, while the relatively fuel efficient, new-energy vehicles will be given a tax advantage, a government official said on an industry conference on the weekend.

"Given that fossil fuels are a limited source of energy and that fuel prices could rise further, China's National Development and Reform Commission (NDRC), the country's top economic planner, will work closely with financial and taxation departments to make adjustment in tax policies for vehicles with different energy consumption rate, " said Li Wanli, Director of the Industrial Policies Department of NDRC.

By charging higher taxes on high fuel consumption vehicles and cutting taxes on new-energy vehicles, the government hopes to encourage people to use fuel more efficiently, Li said. 

In response to the negative impact of new taxations on the automobile market, Li believes a slight slowdown in the market is beneficial to the sustainable development of the auto industry as well as the country as a whole.