Beijing to propose 50% cut to tax on China car sales, report says
China's top economic planning body is proposing to cut the tax levied on car purchases by half, as the impact of an escalating trade war with the United States threatens to slow the Chinese economy and affect demand for light vehicles, Bloomberg reported Monday.
The country’s top economic planning body submitted a plan to key policymakers to lower the purchase tax to 5 percent for passenger vehicles with engines no bigger than 1.6 liters, according to people familiar with the matter. No decision has been made on implementation, Bloomberg reported, citing people who asked not to be identified because the information isn’t public.
Reuters reported earlier this month that the China Automobile Dealers Association submitted documents to the country's finance and commerce ministries proposing the 10 percent auto purchase tax be halved.
CADA has made proposals in previous years that have helped shape auto policy.
China's light-vehicle sales fell 12 percent to 2.39 million last month, the most in nearly seven years, stoking concerns that the world's biggest auto market could contract for the first time in decades in 2018.
After racking up record sales over the past few decades as China’s emergent middle class bought their first cars or light trucks, consumers are retreating from big-ticket purchases, a pullback exacerbated by the phasing out of a car purchase tax rebate.
When China last cut the purchase tax three years ago, car sales soared in a key battleground for global carmakers such as General Motors, Volkswagen Group, Daimler AG, BMW AG and Toyota Motor Corp.
Reuters reported earlier this month that the China Automobile Dealers Association submitted documents to the country's finance and commerce ministries proposing the 10 percent auto purchase tax be halved.
CADA has made proposals in previous years that have helped shape auto policy.
China's light-vehicle sales fell 12 percent to 2.39 million last month, the most in nearly seven years, stoking concerns that the world's biggest auto market could contract for the first time in decades in 2018.
After racking up record sales over the past few decades as China’s emergent middle class bought their first cars or light trucks, consumers are retreating from big-ticket purchases, a pullback exacerbated by the phasing out of a car purchase tax rebate.
When China last cut the purchase tax three years ago, car sales soared in a key battleground for global carmakers such as General Motors, Volkswagen Group, Daimler AG, BMW AG and Toyota Motor Corp.
