Chinese Ministry of Finance has taken a new revolutionary step to encourage the usage of new & cleaner energy. The authority has decided to give tax cuts to new energy vehicles.
New Tax Reform For New Energy Cars:
According to Reuters, the ministry has exempted tax for new energy vehicles. The official publication on the ministry's official website noted that the vehicle and vessel taxes on new energy vehicles and ships powered by natural gas has been scrapped totally. New energy vehicles refer to the pure electric commercial vehicles, hybrid electric cars, with plug-in charging facility and fuel cell commercial vehicles.
Tax Reduction of Small Engine Cars & Energy Efficient Cars:
Besides these, the ministry has also reduced the tax index of small engine cars by half of its earlier levies. Fifty percent reduction of the vehicle and vessel tax has also been offered for the energy-saving cars. Asia Times quoted that this has been an applaudable step by the Chinese finance ministry as the number of electric car owners is increasing rapidly in the whole country.
Current Production and Sales Index of New Energy Vehicles:
The report even suggested that in the first phase of 2018, the production and sales parameter of new energy cars saw rapid heights with numbers as 413,000 produced and 412,000 sold vehicles respectively. Both the parameters were beyond yesteryear's index by 94.9% and 111.5% respectively.
New Energy Cars-Buyers' Choice:
This new vehicle tax regime will save billions for the huge number of energy efficient vehicle owners, according to The Paper. While analyzing the tax cuts on vehicles, independent car analyst Zhang Xiang stated: that the life cycle of an energy efficient car is generally 8 to 10 years, so the new reduction can help each car owner to save several thousand yuan at a time.
Xiang even expected to see a considerable hike in the sales of new energy vehicles, as middle-class people will opt to buy tax exempted cars for their daily usage. The ministry has also declared that the tax cuts are applicable on all new energy vehicles and natural gas powered ships, operating in the country, from the date of publication of the information in the ministry's website.
