The Chinese central government has announced it is cutting the purchase tax on qualifying vehicles by 50% for the remainder of 2022 to help the vehicle industry and market recover from the recent Covid lockdowns, according to local reports.
A notice jointly released by the Ministry of Finance and the State Tax Administration this week confirmed the tax discounts will be effective from the 1st June until the 31st December 2022. The cuts apply to purchases of vehicles costing up to CNY300,000 (US$45,000) and with an engine displacement of up to 2000cc.
The move is in line with an earlier circular released the State Council outlining a broader package of incentives and economic stimulus measures designed to help the country recover from strict lockdowns imposed on a number of cities across China in the first five months of the year.
Vice Minister of Commerce Sheng Qiuping, while acknowledging the need to support all segments of the passenger vehicle market, said the government will offer additional incentives for the purchase of new energy vehicles – particularly in rural areas.
The Shanghai and Shenzhen municipalities have already increased their new registration quotas to help the vehicle market recover, while in Jilin and Chongqing the local authorities recently introduced new subsidies for vehicle purchases.