With the world’s eyes on polluted Beijing this week, the Chinese Finance Ministry has announced plans to combat future problems with smoggy air. The new tax, which could double current rates, is designed to reduce the number of high-polluting new vehicles sold.
Currently, China taxes vehicles with motors larger than 4 liters 20 percent on top of the sales price. That’s set to change to 40 percent. Vehicles with motors between 2 and 4 liters were taxed 15 percent; the new rate will see an increase to 25 percent. Smaller engines will continue to be taxed between 5 and 9 percent with the exception of vehicles with smaller than 1 liter motors. Tiny engines will only be taxed 2 percent, down from 3 percent.
China expects its efforts to curb the rapidly increasing pollution problems the country is facing. Some of the country’s biggest cities have adopted emissions requirements that exceed U.S. requirements and approach European Union levels. Shanghai, for example, has entirely banned heavily polluting motor scooters.
China’s Finance Ministry’s Web site says the new taxation will go into effect on Sept. 1.
