Consumption tax rates for big cars with engine sizes of three to four litres will be raised to 25 percent from 15 percent, starting September 1, the Chinese Finance Ministry has said in a statement.
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The rates for passenger vehicles with engines sizes of more than four litres will double to 40 percent from 20 percent, it said.
However, the consumption tax rate for small cars with engines that are one litre or lower will be cut to one percent from three percent.
The changes “will reduce the use of diesel and gasoline, cut air pollution and help the country achieve its goal in saving energy and reduce pollution,” the statement said.
Concerns about air quality in China’s urban areas have intensified this year, with further attention to the subject drawn by the Beijing Olympics.
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By GlobalDataHigher taxes on large cars also coincides with increased oil prices and a slowdown in the Chinese car market this year.
See also: CHINA: Chinese car market down 17% in July
