China’s central government has announced it will cut the purchase tax on eligible vehicles by 50% for the remainder of 2022 to help the auto industry and the market recover from the recent Covid lockdowns, according to local reports.
A report released this week jointly by the Treasury Department and the state tax authorities confirmed that the tax cuts will be effective from the 1st June to 31st December 2022. The discounts apply to purchases of vehicles up to CNY 300,000 (US$45,000) and with an engine displacement of up to 2000 cc.
The move is in line with an earlier circular released by the State Council, outlining a broader package of incentives and economic stimulus designed to help the country recover from the strict lockdowns that were met in the first five months of the year. number of cities in China have been imposed.
Vice Minister of Commerce Sheng Qiuping recognized the need to support all segments of the passenger car market, but said the government will provide additional incentives for the purchase of new energy vehicles, especially in rural areas.
Municipalities in Shanghai and Shenzhen have already increased their new registration quotas to help the car market recover, while local authorities in Jilin and Chongqing have recently introduced new subsidies for vehicle purchase.