Purchase tax levy at 7.5% to end of 2010

On 9th, premier Wen Jiabao chaired the Executive Meeting of the State Council, at which the measures to promote consumption have been researched and improved. During the meeting, it was determined to extend purchase tax for vehicles with engine capacity of, or less than, 1.6 liters to the end of 2010, however, it will be levied at 7.5%, according to China National Radio Network.

Since last year, the central government has already adopted a series of preferential and stimulating economic policies and measures in response to the international financial crisis, which have effectively inspired the consumption potentials of urban and rural residents, stepped up the production and structural adjustment in terms of home appliances, automobiles, housing, energy-saving and environmental-friendly products, gained concrete benefits for people, especially for the rural and the urban low income families, and played a decisive role in picking up domestic steady economy.

As the development of economy will still withstood severe difficulties and challenges, the central government will maintain the policy to boost domestic demand, especially fortify the role of consumption in giving a fillip to economic growth, so as to achieve steady and relatively fast growth of the economy.

As a whole, most existing policies will have been continued to implement and further to fortify stimulating economic policy. Following is the policy related to automobiles:

The preferential policy, automobiles going to the countryside, will be extended to the end of next year, while motorcycles going to the countryside, which is fit into the subsidy program of vehicles to the rural, will be adopted till Jan, 31st, 2013.

China will extend purchase tax for vehicles with engine capacity of, or less than, 1.6 liters to the end of 2010, and it will be levied at 7.5%. Furthermore, the central government also decided to raise the subsidy for trade-in cars to between 5000 Yuan and 18000 Yuan per vehicle. (Translator：Qinghua /SERENA)

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