China’s Hefei to grant tax break, subsidies to boost car sales

Shanghai (Gasgoo)- The Hefei municipal government has released a slew of policies to help boost automobile consumption, as part of its economic stimulus package.

According to a governmental document issued on June 17, the Hefei government will halve the purchase tax on passenger vehicles that are purchased between June 1, 2022 and December 31, 2022 and priced at no more than 300,000 yuan ($44,750) (excluding value-added tax) with 2.0-liter or smaller engines.

The tax rebate is granted to follow China's decision to cut car purchase tax, which was announced at the end of May by China’s Ministry of Finance and State Taxation Administration.

Photo credit: NIO

As part of the efforts to lift the market consumption confidence, individual users in Hefei, who buy new energy vehicles (“NEVs”) in the second quarter of 2022, will be given 1,000 yuan ($150) per car of electricity subsidy, in addition to the incentives previously granted.

Moreover, consumers will receive 3,000 yuan ($450) per car of subsidies if they scrap old cars between July 1, 2022 and December 31, 2022, and buy new vehicles compliant with the China Ⅵ emission standard from locally-registered car sales companies as the replacement.